Hempfield revenues behind about $400,000 for year because of pandemic

Hempfield is behind in revenues by more than $400,000 compared with this time last year, township officials said.

The coronavirus pandemic has hit global and local economies, forcing businesses to temporarily shutter to help curb the spread of the virus and leaving people out of work.

In Hempfield, the revenue loss is because of fewer payments from the earned income tax, real estate taxes, building permits, recreation fees and the per capita tax, said Melanie Phillips, township finance director. Supervisors will discuss the impacts that loss could have during a June 25 meeting.

“The worst-case scenario is (a deficit) could be as steep as a couple of million,” Phillips said during a township work session. “I think May will give us a better look and, obviously, as we go through the year we will get a better look at how deep this is going to run for us.”

According to a report presented by Phillips, the township is expected to lose between $210,000 and $700,000 from the earned income tax, a main revenue source. About $300,000 in earned income tax was received last week, making up some of the lost revenue, township manager Jason Winters said.

The township is behind by more than $500,000 in real estate tax revenues, although that money is expected to close at normal levels at the end of the year. Supervisors last month extended the discount period by four months, giving taxpayers until Aug. 31 to pay a discounted rate, and from Sept. 1 through the end of the year for the regular rate.

“Residents are most likely taking advantage of the extended discount period this year,” Phillips wrote in her report.

Construction, halted in March and recently restarted, resulted in a reduced number building permits for the year, causing between $200,000 and $300,000 in lost revenues, Phillips said. At the beginning of the year, township officials projected the permits would generate more than $600,000 in revenue.

The closing of parks and recreation facilities has resulted in about $210,000 in lost revenues. Facilities are expected to reopen next month.

The per capita tax was off by more than $40,000, possibly because of the lack of collection by a third-party collector due to the shutdown. The revenue source typically adds about $120,000 per year.

“What does this mean for us?” Phillips asked. “This means that we need to continue to monitor very closely, we need to continue to curtail spending, we need to continue the essential spending only that we’ve been doing since March, and we may have to make some actual cuts.”

Supervisor Tom Logan added, “We got ahead of that curve a little bit already, and just us talking about this now — how we’re going to get through the end of the year and what we’re going to talk about for 2021 — will take us a long ways through that recovery process.”

Supervisor Rob Ritson hopes to look at an 18-month budget to see what spending the township is able to maintain throughout the year.

“I truly believe that Hempfield Township will be fine,” Phillips said.