KANSAS CITY, Mo. — Kansas City, Missouri, anticipates a $50-million deficit during the current fiscal year, primarily as a result of revenue losses and mounting expenses created by the COVID-19 pandemic.
While that amount sounds high, city officials said they aren't not surprised.
"It's very difficult to estimate revenue during a pandemic," Krista Morrison, KCMO budget officer, said.
Through the first two quarters of the 2020-21 fiscal year, KCMO has benefited from residents doing more online shopping as well as revenue increases from property taxes and new construction.
But KCMO also has sustained losses from casinos closures, license and permit revenue, and from money related to utility taxes.
The city has tightened its belt when it comes to spending.
Departments have implemented cuts and have come with creative ways to save. There's also $100 million dollars in KCMO's rainy-day fund.
"Coming out of the great recession, we did not have these kinds of reserves, and so we have clawed our way back, if you will, over these last 10 years to get to the point where we are," Tammy Queen, director of the KCMO Finance Department, said. "I guess maybe my overall message would be don't panic."
Still, leaders are considering ways how to close the deficit.
"We're not filling this with a tax increase,” KCMO Mayor Quinton Lucas said. "What we're going to do, and what we have been doing over the last however many months now that we've been in this situation, is sharpening our pencils, seeing where we can find savings, seeing where we can find new revenue sources, which there aren't a ton."
During Thursday's KCMO City Council business session, the city manager said one possible option is looking at streetlights. Between the electric bill and maintenance, it costs the city $13 million to keep them on.
One option discussed was a switch to LED lights, which would save money in the long run.
"What we're not saying is that we're just giving up on what government does," Lucas said. "What we are saying is that it'll be tighter. It'll be tougher this year, but we'll make sure it happens."
