Wichita Projects Up To $10M Revenue Shortfall Because Of Coronavirus

Apr 8, 2020

Wichita leaders are bracing for massive revenue shortfalls as a result of the ongoing coronavirus pandemic.

City treasurer Mark Manning told City Council members this week that he estimates Wichita could lose between $8 million and $10 million dollars in the coming months. His “middle of the road” projection assumes a 90- to 120-day downturn and economic recovery by this fall.

“I would characterize this as the moderate version,” Manning said. “What worries me is I don’t know if the moderate version is the right version.”

The worst-case scenario, he says, would see a recession lasting years.

“That’s obviously a very dark picture,” he said, “and in that case what I’m showing you today is just the beginning.”

In the coming months, Manning explained, Wichita will lose out on millions of dollars in revenue streams that supply the city’s general fund:

  • Sales tax (12% of general fund): $2 million loss
  • Interest earnings (3% of general fund): $2 million loss
  • Fees and rentals for city facilities (8% of general fund): $2.8 million loss
  • Court fines (3% of general fund): $1.2 million loss
  • Franchise fees (20% of general fund): $600,000 loss
  • Property tax (35% of general fund): $200,000 loss
  • Motor vehicle tax (6% of general fund): $700,000 loss
  • Gas tax (6% of general fund): $450,000 loss
  • Licenses and permits (1% of general fund): Projected loss uncertain

Manning said some effects will be immediate, but in most cases, the extent of the impact won’t be known until May or June.

"We know and we’ve studied what our revenues tend to do in downturns," he said. "What we don’t know now is what the severity of this crisis is and what the severity is going to be."

The city has already furloughed hundreds of workers and instituted a hiring freeze. City leaders are now considering other responses, such as postponing new capital projects, as they near next year’s budget cycle.

The Wichita City Council this week created a $1 million COVID-19 response fund to track expenses related to the pandemic that could be reimbursed later by the federal government.