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York City says 'no' to furloughs as coronavirus promises budgetary pain

Logan Hullinger
York Dispatch
York City Mayor Michael Helfrich demonstrates a method  to cover a cough during a press conference announcing a declaration of disaster emergency due to the COVID-19 virus Thursday, March 12, 2020. He also announced that York's Saint Patrick's Day parade was cancelled due to the Coronavirus threat. Bill Kalina photo

York City does not intend to mirror the county's decision to furlough employees amid the growing economic fallout caused by coronavirus mitigation efforts, Mayor Michael Helfrich said Wednesday.

Helfrich made his position clear as state officials face slumping tax revenues and after York County's announcement Tuesday that 277 employees would be furloughed in order to save cash. 

It's in the city's best interest to keep money flowing into families' homes, Helfrich said Wednesday. 

"We believe if we can provide a paycheck now, we can help over 300 families," he said. "We don't want to be in the position to take away the only check that's going into the household."

As of Wednesday, the number of cases of the coronavirus statewide surged to 16,239, with 309 deaths. York County had 15 new confirmed cases, bringing the total to 233, including two deaths. 

More:COVID-19 cases in Pa. eclipse 16,000, 15 new cases in York County

More:York County to furlough nearly 300 workers

Still, the city is bracing for prolonged economic strain because of COVID-19, the disease caused by the coronavirus.

York City's 2019-20 budget required $6 million in reserve funds to compensate for skyrocketing pension and health care costs.

But those reserves are dwindling, Helfrich said, and the city will have to make changes moving forward to compensate for those increases and the effects of the coronavirus — including looking at deferments on pension costs.

Lost tax revenue is also expected to create a bigger strain come budget time.

Property taxes, for example, bring in roughly $19 million annually to York City, and income taxes bring in about $7 million. But it is unknown how much tax revenue will be lost, Helfrich said.

Layoffs and furloughs hit businesses throughout the state after Gov. Tom Wolf ordered most businesses to close their physical locations an in effort to slow the spread of the coronavirus. 

York County's furloughs take effect Saturday, and employees will be notified by their director or row officer this week if they will be among those sent home, said President Commissioner Julie Wheeler on Tuesday.

"These temporary moves are being made to hopefully avoid having to make deeper, and possibly permanent, cuts in the future," she said.

County employees in 31 departments will be affected, and the county expects to save about $717,000 per month as a result, according to a news release sent out later Tuesday.

The state budget is a complicating factor, as local governments often rely on state aid and grants. On Wednesday, state officials projected the outbreak will cost Pennsylvania at least $2.7 billion in revenue over the next 15 months and could punch a $4 billion hole in its budget, reported Spotlight PA.

Officials in other large municipalities in York County have mixed feelings about whether to follow the county's lead.

Springettsbury Township officials, for example, don't anticipate any layoffs at this time because of the township's strong financial standing.

"Fortunately, the township has a pretty lean organization and some healthy reserves to rely upon," said township manager Ben Marchant. "We’re not having to look at furloughs or layoffs at this time."

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The township — which has roughly $7.5 million in reserves — still does, however, expect a decrease in tax revenue from payroll, business privilege and mercantile taxes. 

In response, it has canceled some budgeted expenditures, such as traveling and training, Marchant said.

West Manchester Township officials, on the other hand, say furloughs could be in the township's future.

“A furlough of employees would definitely not be off the table if this continues," said Kelly Kelch, township manager.

Pennsylvania Gov. Tom Wolf has asked all nonessential businesses in Pennsylvania to close.

The township has already canceled budgeted purchases that aren't essential, Kelch said.

And further cost-cutting measures may be on the horizon, with the township expecting decreases in revenue from real estate and business privilege and mercantile taxes.

— Logan Hullinger can be reached at lhullinger@yorkdispatch.com or via Twitter at @LoganHullYD.