Brown expects WB deficit for 2020, attributes it to pandemic

WILKES-BARRE — A month into the second half of the city’s financial year revenues topped expenses, but the difference paled in comparison with the July balance in 2019.

A draft of the monthly financial report listed a balance of $6.6 million, a drop of $2.2 million for the same period last year when the novel coronavirus, COVID-19, had not sickened and killed millions of people around the world and harmed economies.

Through seven months, the city reported $29.1 million in revenues against $22.5 million in expenses.

Wilkes-Barre Mayor George Brown said he expected his $51.9 million balanced budget would have produced a surplus by year’s end. But with the state-ordered shutdown to mitigate the spread of the virus some revenues in the city budget won’t hit their mark, especially the permit fees, Brown said. The city also has to contribute $7.2 million into its pensions and repay the $3 million Tax Anticipation Note it takes out annually at the start of the year to pay the bills while awaiting tax revenues.

“I think there will be a deficit,” Brown said. “I think it will be close to $4.4 million.”

The city has been itemizing expenses tied to the pandemic. Through July 31, the total was $603,125, according to the draft report. That’s not a worry because Brown said he anticipates the city will be reimbursed for the unbudgeted expenses including:

• $168,265 for Public Health Administration expenditures.

• $160,615 for General Building & Plant expenditures.

• $59,455 for Fire Administration expenditures.

• $44,896 for Communicable Disease Control salaries.

Also working in the city’s favor is the approximate $700,000 in savings it will realize this year with the refinancing of bonds worth $21 million, Brown said.

Still the draft report showed drops in 16 of the 28 revenue categories in a year-over-year comparison.

The property tax that was not raised this year brought in $10.4 million of the $11.5 million budgeted. The revenue collected was $471,694 less than the end of July 2019. The installment payment deadlines were extended due to the pandemic with July 3 the last date to make the final and fourth payment.

Licenses and permit fees brought revenues of $691,397, a drop off of $230,843 from last year. The city collected $2.5 million in charges for services, nearly $300,000 less than last year.

The earned income tax collection increased from 2019, however. The draft report listed $8.1 million in EIT revenue, $333,663 more than last year. The city budgeted $15.6 million for the EIT that along with the property tax are the largest revenue sources.