CHARLESTON, W.Va. — The city of Charleston is on track to end the fiscal year with a $2 million deficit due to the coronavirus affecting business and city activities since March.

“We are now operating in a bizarre and uncertain time when a majority of our businesses — both big and small — are closed up to ensure public health,” City Manager Jonathan Storage told members of the Charleston City Council on Monday.

The Charleston City Council in March 2019 approved a $98.9 million budget which goes through this June.

The deficit primarily stems from changes in tax revenues; business and occupation tax collections for the first two weeks of April were $291,000, a 70% decrease from the same period a year ago. Storage said B&O taxes make up “nearly half” of the city’s revenue at $43.9 million; taxes are around 70% of what the city was expected to bring in based on the 2019 fiscal year budget.

The city announced on March 30 it would be waiving tax penalties for missed B&O tax collections, and the Charleston City Council voted Monday to waive interest for late first-quarter B&O tax payments.

The city has also reduced nonessential business during the pandemic.

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Jonathan Storage

Property tax collections in March were 30% below estimates, changing the year-to-date account surplus of $262,000 at February’s end to a deficit of $108,000 after March. According to Storage, April collections are trending 30% below what the city recorded last year.

“If this trend continues, expected year-to-end shortfall would be around $475,000 in property tax,” he said.

City sales tax collections are 1.7% lower than the same period in 2019, but Storage said the data is through February.

“Future receipts of sales tax revenue are expected to be significantly diminished in the coming months,” he said.

Storage estimated when the yearly quarter ends in July, the city will have a $3.5 million revenue shortfall.

The city has $4.3 million in its rainy day fund, which Storage suggested will need to be used starting in July.

“This single source of savings, though, will likely not be sufficient to carry the city through this health and economic crisis,” Storage added. “Other special funds bearing sizeable balances may need to be tapped to carry us through this crisis.”

Charleston Mayor Amy Goodwin said despite the impact of the coronavirus, the city’s first priority is protecting the public and city employees.

“We have always treated this as it is: a health pandemic,” she said. “The health and safety of our staff, our team, and certainty the residents of Charleston have remained a top priority, yes, with huge financial implications.”

Goodwin said the Kanawha County Commission will vote Tuesday on providing the city $100,000 for giving first responders a pay boost during the pandemic. Goodwin asked councilmembers to approve additional “hero pay” for first responders and refuse workers at its May 4 meeting.