LUBBOCK, Texas – In a special meeting of the Lubbock City Council on Friday, City Manager Jarrett Atkinson described a hard financial hit to City Hall.
As a preamble to his main point, Atkinson told the council that ridership on Citibus is down 70 percent. He said the airport is running about 10 percent of normal. In other words, air travel is down roughly 90 percent in Lubbock.
The painful part of this is yet to come – sales tax revenue. So far, Lubbock is $1.5 million over projections in sales tax revenue for the fiscal year. But the sales tax payment representing the business that happened in the month of March is expected to show a drop.
“The hospitality and transportation sector in Lubbock has been hit extremely hard and extremely quickly,” Atkinson said. “This carries over to your hotel, motel occupancy.”
Atkinson also said hotel occupancy is running at 28 percent when this time last year it was 78 percent.
The financial hit, as most people already know, comes from the impact of COVID-19 or coronavirus. People were told to stay home and non-essential businesses were ordered to stop. Major events, starting in mid-March, were postponed or canceled.
At the time of this report, four people in Lubbock died from COVID-19.
“This also impacts your restaurants, rental cars and many others,” Atkinson said. The only cars in the parking lots of rental places, he said, are the unused rental cars.
Atkinson said the projection is that sales taxes for the current fiscal year will go from $1.5 million over to $3 million below the budget estimates. That’s a $4.5 million estimated loss, Atkinson said.
The city manager told the city council that the local office of Texas Workforce Commission in one day handled more requests than it normally does for a whole month.
Things will start to get better financially for the city in September, Atkinson said.
The city has already instituted a hiring freeze for everything except public safety and public health. Atkinson said that will make up for $1.7 million of the shortfall.
Many uncommitted projects were put on hold along with vehicle purchases. For now, street maintenance continues. However, Atkinson said that could change if things get worse. Discretionary expenses and travel were halted, he said.
“We are above budget for the moment,” he said. As sales tax revenue falls, the surplus will evaporate and become a shortage. It’s not all bad.
“We have seen some sectors in the economy that so far are still strong” He cited building permits, planning and zoning cases. “We do expect them to slow.”
Current projects around town seem to be continuing for now, he said.