Savannah deficit projection dips but could continue in 2021

Savannah city leaders are projecting a $4 million deficit this year because of a shortfall in sales and lodging tax collections related to the COVID-19 pandemic. (AJC Photo/Stephen B. Morton)
Savannah city leaders are projecting a $4 million deficit this year because of a shortfall in sales and lodging tax collections related to the COVID-19 pandemic. (AJC Photo/Stephen B. Morton)

Credit: Stephen B. Morton for The Atlanta Journal Constitution

Credit: Stephen B. Morton for The Atlanta Journal Constitution

SAVANNAH — Savannah city leaders are projecting a $4 million deficit this year because of a shortfall in sales and lodging tax collections related to the COVID-19 pandemic.

The Savannah Morning News reported the current projected shortfall in the city’s $425 million spending plan is down from an original projection of a $13 million deficit.

City Manager Pat Monahan said the city has saved $9.2 million by reducing hiring, restricting travel, buying fewer supplies and other measures.

Chief Budget Officer Melissa Carter said city revenues are $7.5 million lower than budgeted with the potential for more drops due in large part to hotel/motel tax declines.

“We have been on a proverbial roller coaster with high points and low points, to changing the way we do business to meet changing priorities,” Carter said. “And we’ve been doing this with a spending base that has increasingly become less and less reliable.”

She told City Council members that spending controls won’t end when the current budget wraps up Dec. 31 and that more cuts will be needed in the 2021 budget. The city could cut costs by moving city employees out of leased buildings.

One bright spot was a $2 million windfall in back sales taxes from the state, part of a statewide adjustment in sales taxes after an audit found the state wasn’t sending enough money to cities.

City officials had hoped to offset $1.5 million in personnel expenses with federal pandemic aid, but they said Gov. Brian Kemp won’t release any more funds to the city.

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