HATTIESBURG, Miss. (WDAM) - Layoffs are coming for City of Hattiesburg employees as the coronavirus pandemic cuts into revenue streams.
Hattiesburg Mayor Toby Barker announced Monday the city “will experience a reduction in force” beginning this week.
With non-essential businesses reduced to carryout and delivery service at best and social isolation practices keeping people in their homes, the money Hattiesburg receives monthly from the state as a percentage of sales tax is expected to fall short of projections budgeted at the beginning of fiscal year 2020.
It’s tough and uncomfortable, and it is the last thing we want to do,” Barker said in a statement. “However, we have to take steps to maintain a balanced budget, especially when we don't know how long this will last. By going through this process now, we afford our employees who are let go to take advantage of enhanced unemployment benefits due to the CARES Act.
“It is my hope that we can regain some of our economic momentum while still prioritizing public health, and we’ll then be able to have conversations about adding back positions to the city’s workforce.”
The city employs about 600. How deep the workforce cuts will go was not available Monday.
City directors have been asked to provide recommendations for reductions in their departments this week, with notifications to employees coming over the next five to seven days.
“We have endeavored to be very transparent throughout the city’s response to COVID-19,” Barker said. “We believe our employees and our citizens deserve to know the good, the bad and the difficult decisions we are making as a city throughout this public health crisis.
“This crisis has challenged us all, and this decision, while painful, is necessary.”
Aside from ad valorem taxes, sales tax diversions represent one of the city’s largest revenue streams. The diversions are a percentage of the sales tax turned in monthly to the state by a city’s businesses.
In the three-month process, sales taxes are sent to the state for a given month. The state then records the tax the following month before issuing each city their “cut” another month later.
The last diversion listed at the Mississippi Department of Revenue is based on January sales Hattiesburg’s diversion came to $1,764,404, about $42,000 more than from the same period in fiscal year 2019.
And while the February collections should remain in line with projections, the city said March sales numbers took a 15 percent hit after measures were taken to combat the spread of the virus halfway through the month.
The April collections are expected to shrink even further, impacted by a full month of the restrictions and isolations.
Barker said the city began cutting expenses in early March by instituting a hiring freeze for most open positions and restricting out-of-town travel.
In a statement released Monday, the city said sales tax diversions are expected to “lag behind last year’s totals” through the end of the fiscal year on Sept. 30.
“With six months left in the fiscal year, a reduction in force will help the city reduce expenses and possibly alleviate the need for a second or third round of layoffs,” the statement read.
The process for deciding which positions will be dissolved is based on several criteria given to directors so that they can make for recommendations. When deciding reduction in force, they will consider the following factors:
- critical nature of the position to vision of city services
- employee attendance and discipline history
- experience, professional training, length of service and work assignment
- skills and licensure in the area where the city has a requirement
- positions with shared similar duties within an area