Ashland projects $6M revenue shortfall, potential financial strains ahead

ASHLAND, Ore.– The City of Ashland is projecting a $6 million shortfall from two of its major revenue sources. With the coronavirus pandemic drying up virtually all the tourism and entertainment dollars in the city, forecasts are showing some dire news.

Ashland city councilors were faced with the concerning news last week. The transient occupancy tax or “TOT”, and the food and beverage tax could lose nearly $3 million each through the 2019-2021 biennium.

“There definitely are some cuts and trimming that we’ve already done, we’ve already made some changes,” said Adam Hanks, interim city administrator.

Hanks says at this point it’s just a projection of what could happen if actions aren’t taken. He mentioned the city has made cuts but more needs to be done to borrow the term “flatten the curve” financially.

“Smooth out that loss over multiple bienniums and so then the cuts that we do, may have to make at least aren’t at the extreme level that doesn’t really imperil the community in terms of the services we can provide,” he said.

No matter what Ashland will feel somewhat of an effect from this projection. How serious it is depends on when the economy can begin to reopen and what cuts or distribution the city takes to lessen the shortfall.

“It’s an impact to the community and to the city’s budget no matter what,” said Hanks. “It’s how we manage that and how we’re able to utilize those tools to spread that out.”

The trouble, Hanks says, is finding where to cut. The food and beverage tax affects projects like streets as well as debt service payments in the wastewater fund. The TOT funds general revenue and affects such things as the fire, police, and parks departments.

“That’s the real challenging spot of how we address the general fund shortfall,” said Hanks.

The TOT is the fourth largest revenue stream for general revenue. Hanks says the shortfall makes up about 5 percent of the total fund. It’s still a siginificant amount of money to be lost but the city is looking to the state and federal level for possible help in flattening its own curve.

The city is expected to meet for a study session on May 18. More details will be provided to the council on this shortfall and what steps can be taken.

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