HATTIESBURG, Miss. (WDAM) - The City of Hattiesburg moved forward with a reduction in its workforce Friday as a response to COVID-19′s effect on the Hub City’s economy.
Hattiesburg Mayor Toby Barker announced the decision earlier this week due to projected shortfalls in sales tax revenue after many businesses had to close or resort to carryout and delivery services.
As of Friday, the city has reduced its workforce by 27 vacant positions and 39 filled positions.
“This is a tough day for our city. We take pride in working together and serving the citizens of Hattiesburg, and you become very close to fellow employees,”Barker said. “We will do all we can to ease this transition for those workers who will be leaving us. I appreciate the effort and thought put into this process by our directors, who made some very difficult decisions over these past few days.”
Of the 39 filled positions, 22 positions were full-time, six were part-time, one included a salary reduction and 10 were full-time but were moved to positions “not dependent on the general fund or into essential public safety/code positions.”
The city said the total cost savings from the reductions will be $952,519 for fiscal year 2020 and $2,586,710 for fiscal year 2021. According to the city, the 2020 savings will make up for sales tax shortfall for March and April and the 2021 savings will help reduce the structural deficit in the general fund.
More cost-cutting measures may be necessary, depending on how quickly the economy can recover, according to the city.
“COVID-19 has brought trials and challenges to our community, and one pain point is its impact on our local economy. We know there is a growing shortfall in sales tax revenue, and difficult decisions must be made,” said Barker. “By making these moves now, we can make up ground for March and April. There are still hard choices ahead, but we pledge to continue to be transparent to our employees and the public about our financial challenges and the avenues with which we can navigate these uncertain times.”
Before deciding on a reduction in workforce, the city considered other measures such as a 15% reduction in salaries and reducing work schedules to 30 hours per week, excluding sworn public safety personnel.
The city determined savings from these two options would only be short term and “would have a detrimental effect on long-term earning capacities for all employees and would also have an adverse effect on retirement benefits.”
The city said these two options will be considered again if further spending reductions are required.
According to the city, March sales tax dollars indicate a downturn of approximately 15%, which is expected to double for April and possibly May.
“We will continue to study tax revenues as they come in, and we will make difficult decisions in order to bolster the city’s financial position for the remainder of FY 2020,” Barker added.