The city of Athens anticipates a loss of about $46,000 in income tax revenue due to budget-related layoffs at Ohio University.
The city greatly relies on income tax as a source of revenue. With the loss of over 140 jobs from the university, there will be a sizable domino effect in Athens as a result. The city has already begun to deal with the layoffs along with the impact of COVID-19.
The city will not really see the full effect of the layoffs until May 2021, Mayor Steve Patterson said.
“What is intelligible at this time is some of the recent terminations of some of the other staff and the non-renewal notices that went to faculty,” Patterson said. “The faculty that were terminated, basically have, as I understand it, a year left to teach, and then they're no longer going to be working for a university.”
City Auditor Kathy Hecht said income tax is the city's main source of revenue and is of great importance to city funding.
“Income tax is so important,” Hecht said. “It's our main source of revenue, but it supports our general fund, which has about 11 departments in it. Departments are not self-supporting.”
Hecht estimates the city will face about a $1.8 million deficit, which is money that can never be made up for, Hecht said.
“Even if they come back to where they were, we can never recoup all that money that we've lost,” Hect said.
Patterson said the city of Athens does have employment opportunities opening up, including the new Menard’s of East State Street. He also said, however, that Athens does not have a lot of industry.
“I'm thinking, unfortunately, there may be people who are having to look at potential jobs in Columbus or in Parkersburg or somewhere, but again, I don't know what hiring is going on in those places, either,” Patterson said. “COVID-19 has just really created a financial nightmare for a lot of businesses and certainly for cities.”
The city government is also one of Athens’ largest employers but is currently under a soft hiring freeze due to the pandemic, Patterson said.
Hecht said if people leave the city, either by moving away or working elsewhere, the city will lose tax revenue forever. This includes both income tax and sales tax because when people are no longer living in Athens, they will no longer be spending money in Athens.
Lenny Eliason, an Athens County commissioner, said Athens County will see effects from the layoffs eventually as well.
“We're dependent on sales tax more than income tax,” Eliason said. “The city would have more of a direct, immediate result from layoffs as a downfall in the income tax.”
Although many people from the university may be leaving Athens, Patterson said he hopes to see a shift in the way people work after COVID-19, with the possibility of Athens becoming a hub for people working remotely in places like Columbus.
“I'm actually hoping that things may turn in a different direction as across the nation and around the globe,” Patterson said. “People who have been working remotely in the business ... I think that it may create a situation where Athens could become a bedroom community with a very low COVID-19 rate to where people will sit there and think, ‘You know, it's beautiful in Athens, and there isn't a high infection rate, and the cost of living is decent in Athens. Maybe I can just work remotely for company X, Y, or Z here in Athens.’”
