SAN ANTONIO – The pandemic may be winding down, but its effects on the city’s budget could last for years.
In a presentation to San Antonio city council members on Wednesday, city staff provided forecasts that showed the city’s general fund and Hotel Occupancy Tax (HOT) fund could face years of deficits as revenues climb back from the pandemic. However, the forecast did not account for the hundreds of millions of dollars the city will receive through the latest federal COVID-19 relief bill, most of which can be used to offset lost revenues.
Sales tax, hotel occupancy tax, fines, permits, and various other revenue streams for the city took a dive with the pandemic last year. While they are bouncing back, some faster than others, it will take time for them to reach pre-pandemic levels.
The HOT fund -- which includes revenues from the convention center, Alamodome, and hotel occupancy tax and helps fund arts organizations -- was one of the hardest-hit areas. It’s expected to lose $187 million in revenue before Fiscal Year 2025, when it is expected to reach the same revenue level it had in FY 2019.
The general fund, the largest part of the city’s budget that pays for everything from parks to police, is doing alright this year. In fact, it’s expected to end the year with a nearly $25 million surplus, which could be used to help avoid numerous cost-saving measures planned for the FY 2022 budget -- like more delayed street maintenance and furloughs for city employees.
However, when those planned reductions are left in the budget, the city forecasts nearly $148 million in deficits over the following four years.
That forecast also includes estimated pay raises for police officers, which are still being negotiated.
While the forecast paints a bleak picture, it does not include the $466 million the city estimates it will receive from the American Rescue Plan Act (ARPA), the latest federal relief bill passed in March.
Most of that money, $327 million, is available through 2024 and can be used to replace lost revenue, provide fiscal stability for organizations, and deal with immediate needs.
City staff members said they have only recently received detailed guidelines from the federal government on how to use the money. But City Manager Erik Walsh told council members that the general fund and HOT fund would likely be priority areas.
City staff members are expected to present some suggestions on how to use the federal money in June.
ALSO ON KSAT.COM:
Texas’ pandemic budget shortfall disappears, as latest forecast shows a surplus