The economic impacts of the COVID-19 pandemic have finally made their way to Santa Barbara’s City Hall, as city officials have announced that “hundreds” of hourly employees have been or will be laid off.
Due to the coronavirus outbreak, the city’s general fund and other tax revenues — such as property, sales and bed taxes — have taken a “dramatic hit” from the cancellation of city operations, programs and activities, City Administrator Paul Casey wrote in an email to city officials Friday.
“This loss of revenue directly impacts our ability to continue to pay the people who provide these services,” Mr. Casey wrote.
“With the City not providing these services in the foreseeable future, it became necessary to give official notice to the employees,” wrote Mr. Casey. “This decision was not made lightly, as they have been valuable and effective partners in the delivery of the services we provide as a City.”
Mayor Cathy Murillo told the News-Press that local tourism is virtually at a standstill, while the majority of stores within the city — including many on State Street — have been forced to alter operations or close altogether for the foreseeable future.
“In good times we would be rewarding our employees. We’re dealing with a global pandemic, which is hurting us in terms of our revenue sources and I’m so sorry that it means we have to lay off some people,” Ms. Murillo said.
As of Friday night, city officials were examining how many employees and which departments would be affected, with initial estimated of several hundred, Ms. Murillo said.
“What’s giving me some hope for our employees is… the relief coming from the federal government and unemployment benefits that would come from the state,” she said, referencing the $2 trillion stimulus package passed by the House on Friday, along with funds from the state.
“I know it’s not the same as having the security of having a job and taking pride in your work and earning a paycheck, but these are incredibly strange and difficult times.” she explained. “Who has ever worked through a pandemic before? I’m 59 and I haven’t lived through one. I mean, we had SARS and AIDs was very frightening, this is on a whole different level and I’m really sorry for my employees. My heart goes out to them. On top of the stress of having to stay home and avoid getting infected, and then this other stress is on them that they’ve been laid off. I’m very sorry for them.”
Ms. Murillo explained that many who visit the South Coast are from around the globe or from other areas of the state. With mandates requiring many to stay indoors, downtown businesses have already taken a hit.
“We’re so used to that hustle and bustle, and we love it when people are here enjoying themselves and it’s just the opposite now,” she said.
Health officials confirmed an additional 15 positive COVID-19 cases in Santa Barbara County Friday afternoon, bringing the total cases to 47. Ms. Murillo expects the number of positive cases to continue to grow.
“I think the numbers are going to climb and people are just going to hunker down,: she said. “It’s going to feel dangerous after a while, just going outside.”
In his email to city officials, Mr. Casey explained that the official notices were necessary for employees to be eligible to pursue unemployment claims, take advantage of the city’s Employee Assistance Program and other resources for financial help. That being said, some employees may have a chance to return to their jobs in the future.
“When we get our programming and facilities back up and running, we hope to be able to re-hire many of these outstanding hourly employees,” Mr. Casey said.
Also on Friday, the city of Santa Maria announced it was imposing a hiring freeze as it braces for a “significant blow to its tax revenues and resulting budget cuts” due to the coronavirus pandemic. The city declared a local state of emergency earlier this month to obtain additional resources for municipal services.
“This pandemic is sending economic shock waves around the globe and here in Santa Maria,” Public Information Manager Mark van de Kamp said in a news release. “The economy’s health or sickness is quickly reflected in the City’s ability to provide services. Consumer spending drives our revenue, which primarily funds public safety.”
Nearly half of the city’s general fund revenue – 48% – is sales tax, including the local Measure U sales tax.
The Santa Maria City Council will receive a presentation from City Manager Jason Stilwell about the pandemic and its regular meeting April 7.
“We know this community strongly supports the City and the top-quality public safety services we have, but we expect a significant revenue downturn, resulting in service reductions,” Mr. van de Kamp said, adding that the severity of the financial blow to the city is still being calculated.