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Mayor: No City Employee Layoffs Yet As Cleveland Weathers COVID-19

Strong first quarter revenues have helped cushion Cleveland's city budget from the full financial blow of the coronavirus, Mayor Frank Jackson said Wednesday. [Nick Castele / ideastream]
Strong first quarter revenues have helped cushion Cleveland's city budget from the blow of coronavirus, Mayor Frank Jackson said Wednesday.

Cleveland’s more than 6,500 workers are safe from layoffs for now, despite budget losses from the coronavirus, Mayor Frank Jackson told employees Wednesday.  

The city’s 2020 budget was written with a possible recession in mind and Jackson’s administration has been managing costs as COVID-19 chips away at revenue, Jackson said in a 45-minute briefing on the city’s finances at Cleveland Public Auditorium.

About 36 minutes into the mayor’s discussion of the city’s budget position, he paused as he looked out on the audience.

“I’ll get to the punch line, so as you understand the punch line: Right now, you ain’t getting laid off,” he said, said to applause from staff.

Cleveland has found other ways to cut back. The city has suspended non-critical hiring and delayed police and fire cadet classes, Jackson said.  

But if the economic downturn drags on, Jackson may have to start cutting payroll.

“So we’re working hard to ensure to ensure that that scenario does not happen,” he said. “But a lot of it’s out of our control, and let me just point out this. As I said to you, this pandemic is not over.”

Other local governments haven’t been so fortunate during the pandemic. Cuyahoga County expects to miss out on $76 million in revenue this year, as COVID-19 shutdowns dry up sales tax income. Many county employees must take 10 furlough days over the next several months.

Cleveland officials had also tried to limit overtime, though this spring’s protests proved to be an exception. The city spent $3 million on overtime pay during the May 30 demonstrations and in the week after, Jackson said.

The city began the fiscal year with a $37.5 million rainy day fund and another $43 million in unencumbered cash, which is cushioning the blow of the pandemic-driven economic freeze, Jackson said.

In April and May, general fund expenses exceeded revenues by a combined total of $26.3 million, according to budget numbers Jackson read during the presentation. But thanks to a strong first quarter – before the pandemic set in – Cleveland’s year-to-date deficit stands only at about $4.5 million, he said.

Event cancellations and minimal hotel bookings have hurt Cleveland’s admissions and bed tax revenues. City agencies that rely on fees — like water, utilities and the airport—have also seen a dip in revenue, Jackson said.

Nick Castele is a senior reporter covering politics and government for Ideastream Public Media.