EL PASO, Texas (Border Report) — El Paso will apply a 12-week pay cut for municipal employees and place some of them on furlough, as the City tries to offset big revenue loses brought about by the COVID-19 crisis.
El Paso City Council approved the salary reductions on a 5-3 vote and the pending furloughs unanimously on Monday. City officials said an announcement would be made later in the day detailing the furloughs.
The pay reduction will affect more than 3,800 city workers. However, most of them (3,382) will only see a 1% reduction. Professional-level and management will see reductions of up to 5% starting on May 24. Police officers and firefighters won’t be affected due to collective-bargaining agreements.
Chief Financial Officer Robert Cortinas said the two-week furlough of 450 employees would save the city $415,000. This is but a drop in the bucket to make up for an expected $26 million deficit for the current fiscal year and a $60 million hit in the 2021 fiscal year. The City is looking at a 7.4% loss in sales tax revenue for the current fiscal year.
But in 2021, the City expects to lose $16.2 million (-17.2%) in sales tax revenues as many non-essential businesses have closed — and some may never reopen — as a result of COVID-19 restrictions. Other expected loses include $9 million in franchise fees, $3.7 million in fines and forfeitures, $2.7 million in licenses and permits, and $4.2 million in international bridges toll transfers. Property tax revenues aren’t expected to be affected as of yet.
Cortinas said he anticipates a “long road” to economic recovery, perhaps of up to 18 months. He added that city staff is working to slow down capital projects to save money.
The City is also curtailing services — not including fire or police — and contributed to a communitywide economic recovery plan.
The community relief includes:
- $2 million for El Paso Small Business Emergency Relief Program (City-County partnership with $1 million each),
- $100,000 for El Pasoans Fighting Hunger (unbudgeted expenditure will be covered by salary adjustments),
- $50,000 for daycare utilizing Workforce Solutions (unbudgeted expenditure will be covered by salary adjustments), and
- $650,000 assistance for the homeless and providing them access to two municipal facilities.
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