Harris reviewed the impact of the coronavirus pandemic on the city’s budget during a Monday Alpharetta City Council workshop held by video conference. The loss of tax income and other fees is a blow to the city’s budget, Harris said.
For the upcoming fiscal year of 2020-21, the city estimates it will lose the most money in hotel/motel taxes — a $919,000 loss is projected, equal to a 27% drop from original projections before coronavirus. The second largest loser will be in parks and recreation event fees, where an estimated $525,500 will be lost, equal to a 20% drop from original projections.
The city’s Local Option Sales Tax had been on track to collect $17.1 million this fiscal year, but that will be reduced by about $500,000, Harris estimates. The LOST money goes into the general fund to be spent on police, fire and other services paid for out of the city’s general fund.
For now, neither cities nor citizens can know how long the economy will be hobbled.
Alpharetta Economic Development manager, Matthew Thomas thinks the city will need to confront a new normal when office workers return. Alpharetta currently has 25 million square feet of office space, but he thinks a substantial number of corporate employees might continue working remotely even after the crisis is past. “That could potentially lead to companies executing smaller leases in the future,” Thomas said.
Alpharetta has 25 million square feet of office space. Before the public health crisis shuttered offices, so many workers came into the city on each workday that it doubled its population. Businesses have been paying 62 percent of the city’s property taxes.
“Alpharetta has become a boom town over the past six to eight years, primarily on the back of the redevelopment of our mixed-use commercial real estate and the hospitality to support that,” said Mayor Jim Gilvin. “This is a gut punch. This virus and everything that’s going on. It’s completely changing the field of how businesses large and small are going to adapt to that.”