The decision to eliminate 66 city employee positions because of the coronavirus pandemic’s effect on sales taxes will save $3.5 million through fiscal year 2021, Hattiesburg Mayor Toby Barker said Friday night in an online address.
Barker had announced the planned cuts April 27, and he said more cuts may be needed if the local economy does not recover quickly enough.
The loss of the 66 positions – 27 vacant and 39 filled – is expected to save $952,519 for fiscal year 2020 and $2,586,710 for FY 2021. These savings provide funds to cover shortfalls in sales taxes for March and April and to reduce the structural deficit in the General Fund for FY 2021.
“This is a tough day for our city,” Barker said. “We take pride in working together and serving the citizens of Hattiesburg, and you become very close to fellow employees. We will do all we can to ease this transition for those workers who will be leaving us. I appreciate the effort and thought put into this process by our directors, who made some very difficult decisions over these past few days.”
Of the 39 filled positions, 22 positions were classified as full-time, six classified as part-time, one position included a salary reduction, and 10 of the 39 positions were full-time but were part of an opportunity to move employees to positions not dependent on the General Fund or into essential public safety/code positions.
“COVID-19 has brought trials and challenges to our community, and one pain point is its impact on our local economy,” Barker said. “We know there is a growing shortfall in sales tax revenue, and difficult decisions must be made. By making these moves now, we can make up ground for March and April. There are still hard choices ahead, but we pledge to continue to be transparent to our employees and the public about our financial challenges and the avenues with which we can navigate these uncertain times.”
Other options to cut costs included a 15 percent cut in salaries or a reduction in work schedules to 30 hours, except for sworn public safety personnel. Both options will be considered again if further spending reductions are needed.
However, leaving the salaries at a reduced level past fiscal year 2020 would have a detrimental effect on long-term earning capacities for all employees and would also have an adverse effect on retirement benefits.
“We will continue to study tax revenues as they come in, and we will make difficult decisions in order to bolster the city’s financial position for the remainder of FY 2020,” Barker said.