Gearing up for an austere fiscal year, courtesy of COVID-19, the city of Palestine last week laid off seven part-time workers – four of them at the public library and others at the visitors center.
City officials hope adjustments to the current budget will enable the city to avoid major cuts for the next fiscal year, which starts Oct. 1. “We'll have to be cautious until we know more,” Mayor Steve Presley said. “Right now, though, I don't think we'll have to make major cuts.”
For former assistant librarian Hilda Ezzell of Palestine, however, the cuts are already major.
Over the last seven months, she had worked, joyfully, at the city library for 20 hours a week. Earning less than $9-an-hour with no benefits, Ezzell did a variety of tasks, including labeling and shelving new books and working with patrons.
“Helping the community gave me a good feeling,” she told the Herald-Press Wednesday.
The good feelings ended one week ago, when a city administrator visited the library and told her and three of her part-time co-workers their jobs were gone. They then were told to leave the building immediately.
“I felt horrible,” Ezzell said. “They told us it was nothing personal – that we were good employees.” She also worries the library will close.
The good news for Palestine is that city officials expect COVID-induced losses to be less than those of many other cities.
In fact, sales tax revenue for Palestine in April was up 20 percent from a year earlier. Sales taxes provide roughly 40 percent of Palestine's general revenue fund of about $13 million. Property taxes provide most of the rest.
Stimulus checks to consumers and federal boosts to unemployment compensation accounted for some of the local increase in sales taxes, Presley said. Residents also spent their money locally, he said.
Jobs in Palestine are more stable and less influenced by economic cycles, Presley said, noting the large number of prison and other government jobs, as well as a chicken plant and Walmart.
Local sales tax figures for May are not yet available. Statewide, however, local sales tax allocations have dropped.
Presley said he doesn't know if the city will make additional layoffs over the next three months. Practically everything is on the table for potential cuts in the 2020-2021 budget.
Cities across Texas also are bracing for budget cuts, due to a slumping COVID-19 economy that has, nationwide, closed businesses and eliminated nearly 40 million jobs.
Even expected federal aid to cities and stimulus checks that boosted consumer spending this spring won't fill all the holes in municipal budgets.
In Palestine, additional money for retirement obligations also will pose a budget challenge. So will the loss of inmate maintenance workers for most of the summer. In Texas, inmates are not paid for their work.
If possible, Presley said he wanted to lower local property taxes to help struggling small businesses.
Statewide, some pools, parks, and public library branches will close. In some larger cities, even police departments – traditionally sacred cows in municipal budgets – will face pressure to reduce spending. Cities will wrestle with budget deficits that likely will affect public services for the next two or three years.
Palestine City Council members need to approve a proposed 2020-2021 budget and tax rate by Sept.1. This year, city department budgets are considering the next five years.