Voluntary Furloughs for City Employees Demonstrates Economic Ripple Effect of COVID-19

City Manager James Freed sent a letter to Port Huron’s Mayor and City Council on May 1st describing the effect lost revenue from local income tax, State Revenue Sharing, Act 51 revenues (funded by gas taxes), and revenue from utility payments collected by the city will have on the City’s budget. In response to the anticipated shortfalls, his goal is to reduce staffing in the city by 15% through voluntary furloughs of city employees.

The Stay at Home order has forced every business in our community to change the way it functions. Closure of buildings, decreased sales, and employees working from home have dramatically changed the way individuals and businesses spend money and use resources. The consequences have sent a ripple effect into our economy that no one quite knows how to predict, and many leaders are struggling to manage.

The City of Port Huron is anticipating significant loss of revenue and responding by beginning the process of reducing its work force, including employees in the Police and Fire Departments. Freed also talked about reductions to the Streets budget and dramatically scaling back recreation programs. According to Freed’s letter, “City pools and McMorran will not open this summer and possibly fall due to social distancing orders.” On the bright side, he noted that the City had a very strong budget year up through February.

These challenges are not unique to Port Huron. They will be felt in every community around the world as business and government leaders try to anticipate and respond proactively to the domino effect of economic changes in this new reality.

Reporting for WGRT – Jessie Wiegand