Omaha City Expects Hard Financial Hit During 2020 Due To Coronavirus

Press release from the City of Omaha:

April 21, 2020

The City of Omaha expects a hard financial hit in 2020 due to COVID-19.

“Actions taken to stop the spread of the virus will impact the City’s finances just as they have impacted families and our business community,” said Mayor Jean Stothert. “We have no higher priority than the safety of our citizens. We would do all this again in a New York minute to reduce the risk of illness and death.”

Approximately 50% of the City’s $420 million General Fund is funded with sales and occupation tax revenue including hotel-motel tax, rental car tax and restaurant tax. The police and fire departments and trash collection accounts for three quarters of the total General Fund budget.

The City has taken several steps to address the anticipated revenue loss including a hiring and spending freeze, a $5 million budget reduction by city departments, and a review of all contracts.

“It’s pretty hard to project the shortfall. We don’t know the duration of the shortfall or the velocity of the recovery,” said Finance Director Steve Curtiss.

In addition to the cancellation of events including the NCAA basketball tournament, College World Series, Berkshire Hathaway annual meeting and the postponement of the U.S. Olympic Swim Trials, tax revenues will be significantly lower due to the shutdown of bars and restaurants and the decision by many retailers to voluntarily close.

States and local governments that meet population requirements are receiving federal aid from the CARES Act for COVID-19 related expenses. Omaha does not meet the 500,000 population threshold and will not receive federal aid, but Douglas County will receive approximately $160 million dollars. The State of Nebraska will receive $1.2 billion.

Douglas County is the only county in the State of Nebraska that will receive direct deposit aid. No other county or city in Nebraska qualifies. Douglas County has indicated it is unlikely Omaha will get any of the $160 million in aid. The only reason Douglas County qualifies is because of Omaha’s large population.

“We need an agreement between the City and the State, and the City and Douglas County to receive a share of the CARES Act funds,” said Mayor Stothert.

“We will work with the City as we go through this process,” said Douglas County Board Chairman Clare Duda. “I hope we can use federal funds to help all entities in our county.”

The CARES Act however, does not reimburse cities for loss of revenue. The City of Omaha has been working diligently with the Nebraska federal delegation for flexibility to provide relief for the loss of revenue.

“I’m fighting for Omaha and I hope the President and our leaders in Congress understand what’s happening in our cities,” said Mayor Stothert. “Many cities are really suffering.”

This press release was produced by the City of Omaha. The views expressed here are the author’s own.