The City of Alexandria is feeling a budget crunch from the ongoing coronavirus pandemic, leaving officials in the Virginia city with no choice but to revise down their funding plan for the next fiscal year.
Alexandria City Manager Mark Jinks announced revisions to his proposed Fiscal Year 2021 budget in response to a $100 million gap amid the fallout to the coronavirus crisis.
The revised proposal calls for a $753 million operating budget in Fiscal Year 2021 — a 5.8% reduction from the nearly $800 million originally set forward on Feb. 18, according to a news release Tuesday.
“When I proposed my FY 2021 budget less than two months ago, the city’s economy was expanding, revenue was growing steadily and prospects for long-term growth were very good,” Jinks said.
“The COVID-19 pandemic has triggered the biggest health crisis in a century and caused what may be one of the biggest, most sudden economic downturns the nation has ever seen.”
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The city stands to generate $35.8 million less in revenue than initially projected for Fiscal Year 2020, which ends June 30.
A loss Jinks pinned on financial impacts from the coronavirus outbreak.
Fiscal Year 2021 looks no sunnier, with a projected revenue shortfall of $56.4 million between July 1 and June 30 of next year.
Among revisions is the cancellation of a planned rise in the real estate tax rate, which would have funded a flood mitigation project at Waterfront Park and facility work at the Minnie Howard School.
Pay increases for city employees have also been canceled and new hiring largely frozen.
The new budget also implements fund balances specifically set aside for economic downturns and other emergencies, plus the allocation of $1 million to the Alexandria Health Department under the federal government’s coronavirus relief program.
Along with potential state funding, Alexandria intends to use that money to bring on additional epidemiological staff despite a hiring freeze on the city government.
More details on the revised budget will be discussed at the Alexandria City Council’s April 14 session, with a public hearing on the budget and real estate tax rate set for April 18.
Both will be held online when dockets are published.
