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Mayor Battle: Huntsville faces a $10-15 million budget deficit due to the impact of coronavirus

Huntsville Mayor Tommy Battle said department heads were asked to do a limited hiring freeze.

Posted: Jul 29, 2020 11:24 PM

The City of Huntsville took a closer look at its finances when it came to the impact of the coronavirus on the city.

On Wednesday, the Huntsville City Council held a work session during which Finance Director Penny Smith gave a 45 minute presentation on the breakdown of city's financial picture. 

Huntsville Finance Director Penny Smith provided an update on the city's finances as impacted by the coronavirus during a Huntsville City Council work session on July 29, 2020. Huntsville Finance Director Penny Smith provided an update on the city's finances as impacted by the coronavirus during a Huntsville City Council work session on July 29, 2020.

"This is financially a difficult year, the COVID-19 year as it will be called for a long time," Huntsville Mayor Tommy Battle said.

Currently Huntsville has an unemployment rate of 7.5 percent, which is below the state rate of 8 percent and the national rate of 11.2 percent. 

Sales and use tax makes up about half of the city's budget. Smith said by the end of the year, Huntsville can expect to lose $7 million in sales and use tax revenue.

Mayor Tommy Battle said because of these and other hits to the budget, all departments are being asked to tighten their belts.

"We've asked department heads to do a limited hiring freeze to cut expenditures. From where we're looking right now, we're thinking that their cuts will be enough to make our revenues equal to our expenditures," Battle said.

Smith said that the slow recovery will persist for at least six to eight months. She said they hope to have a budget for the city council to consider by late August or early September. 

For more on the financial impact of the coronavirus in Huntsville, click here.

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