City workers could face furloughs and layoffs as Tucson deals with steep, unexpected revenue losses as a result of the coronavirus pandemic, Michael Ortega, the city manager says.
It’s still too early to know exactly what steps the city will need to take to weather the financial impact from the pandemic, but Ortega told City Council members Tuesday that jobs could be affected.
“I have said now a few times publicly that that’s the last option,” Ortega said during Tuesday’s council meeting. “I can’t guarantee you that we won’t have that discussion. We’re going to do everything we can to keep us from having those discussions.”
The comments were made during an initial discussion regarding the city’s budget and how that has been affected by the coronavirus. Ortega said he will present more specific numbers at future meetings, but acknowledged they’ve already seen a drop in revenue starting in March.
Ortega said his staff is modeling next fiscal year’s budget with the goal of hoping to “walk down” revenue losses, but that early projections show the decrease in revenue could last through August and plateau through the end of the calendar year. Incremental increases are expected to restart in 2021.
“But keep in mind we would still be below where we started,” Ortega said of the city’s overall budget.
He noted that the city has instituted a hiring freeze, with the exception of public safety personnel and grant-funded positions in the housing and community development program. He’s also recommending making changes to the budget, including asking the city to postpone expected discussions regarding fee increases.
He acknowledged the city could run into scenarios where the furlough and layoff discussions would come back, including not having enough work for some employees — or not having enough money to pay them. The city has provided employees paid leave should their job demands be reduced as a result of coronavirus closures.
“Clearly the uncertainty as we know is the most stressful for the staff,” Ortega said. “I have absolute confidence in our ability to weather this. But I don’t know what that looks like exactly and it would be unfair for me to paint you a rosy picture.”
During the meeting, vice mayor Paul Cunningham said “under no circumstances do I want” furloughs or layoffs, but that he would encourage the city to opt for the former, saying it would provide the employees at least some money in a paycheck.
“We want to flatten the curve on the infection. We need to flatten the curve on the deficit, too,” Cunningham said. “The only way to do that is consider those hard choices. … We need a hiccup not a bump.”
Other members of the council, including Mayor Regina Romero, labeled those comments as premature, saying it’s too soon to tell how the federal CARES act could affect the city budget.
Earlier in the meeting, the city acknowledged they’re waiting to see what funds are available, but that they’ve received $50 million already. The bulk of that money came in the form of a $44 million grant for the city’s transportation department for personal protective equipment and employee pay and the rest was for the housing program.
“I don’t think we have the complete picture and I don’t know how the CARES act or any additional relief acts will impact the budget and it could impact it in a positive way,” Romero said. “We can’t start talking about furloughs without looking at the numbers of how the relief packages will be helping our budget in the long run.”
Earlier in the meeting, the council unanimously voted to use $500,000 from funds with the business development finance corporation as interest free loans for small businesses — and will discuss another $500,000 and how to give those out during next week’s meeting.
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