As coronavirus cuts into budget, Olathe furloughs nearly all city staff for two weeks
Facing deep budget cuts because of the coronavirus pandemic, the city of Olathe will furlough nearly all employees for two weeks.
Like all other municipalities in Johnson County, Olathe is bracing for the long-term economic impacts of businesses, hotels and shopping centers remaining closed during the stay-at-home order. Officials expect the coronavirus shutdown to cut into sales and property tax revenues, as well as franchise fees and court fine collections.
“The budget challenge the city is facing is more significant than faced in decades,” city officials said in a statement. “It will likely not only impact the 2020 approved budget, but revenue estimates show it will carry over into the budget process for 2021.”
City Manager Michael Wilkes said sales tax collections account for more than half of the city’s general fund revenues. He estimates a 21% drop, or $7.3 million loss, in sales tax revenue. Overall, he expects a revenue loss of $18 million, or a 16% cut to the general fund.
“In terms of what we’ve seen in my career here, these are unprecedented numbers which really call on us and the leadership of the organization … to really dig deep in terms of how to manage the process,” he told the City Council at last week’s meeting.
To cut expenditures, the city has implemented a hiring freeze for both current and future vacant positions. And nearly all employees will take two weeks of furlough this year, with the exception of front-line police officers, paramedics and firefighters.
“While the city does not take these decisions lightly, staff feels this is the best, most responsible decision at this time to continue serving residents as best as possible,” officials said.
Along with Olathe, Johnson County and its cities are finding ways to cut expenses during the shutdown. Anticipating a $25 million loss in revenue, Overland Park has furloughed at least 200 part-time employees. Johnson County also has furloughed at least 260 staff members.
This story was originally published April 27, 2020 at 1:06 PM.
