Lehigh Valley city budgets are in the red millions of dollars

Written by on August 28, 2020

Lehigh Valley city budgets are in the red millions of dollars 

By Genesis Ortega

August 28, 2020

[From left] Easton Mayor Sal Panto, PBS39’s Moderator Monica Evans, Bethlehem Mayor Bob Donchez and Allentown Mayor Ray O’Connell at the State of the Valley event in February hosted at the PBS39 studios in Bethlehem.

Mayors across the Lehigh Valley this week expressed serious concern with how COVID-19 continues to cripple city finances. 

The virtual roundtable covered a wide range of topics including 2020 census reporting, the effect of the pandemic on small businesses across the Valley, access to testing and how each of the cities are promoting maskwearing in public spaces. 

City finances were at the forefront of the virtual roundtable. The conversation, hosted by AARP Pennsylvania, highlighted major concerns over how the pandemic has caused unforeseen budget deficits. 

Mayor Sal Panto said that the loss of revenue from tourism, amusement taxes, and parking fees in Easton have added up to a $5.5 million gap which led to furloughed employees and revisions in budget. 

Panto: Our budget is based on the economy. When you shut down the economy for 4 months, you’re shutting off 25% of your income. 

Bethlehem mayor Bob Donchez said the city has also had to make some tough decisions in the past few months and anticipates making difficult decisions  moving forward. 

“I implemented a hiring freeze, we cut back on overtime, we furloughed employees, we ordered all departments to cut their discretionary spending, we put out our borrowing for an additional year and we are starting the process of our 2021 budget and there is no question there will be a deficit,” Donchez.

The exact number of this deficit will not be known for another week. 

In Allentown, Mayor Ray O’Connell said they addressed their large deficit numbers early on in the pandemic by asking department directors to reduce their expenditures by 7%– ultimately lowering their deficit from $11.4 million to where it stands now at $7.7 million. 

Bethlehem anticipates asking department heads to reduce their spending by 10%. 

While the Allentown mayor does not think that raising taxes will be feasible for already struggling families– Easton may see a tax increase or a reduction in municipal services according to Mayor Panto– unless the state can step in with additional funding. 

I’m disappointed in the state. They have $1.3 billion still leftover in their federal allocation. And the state has decided not to give any money directly to local communities, so we’re on our own,” said Panto.

Despite the revenue shortfalls, all cities said it was important to them to provide small business grants to owners who found themselves closing their doors due to the Governor’s stay-at-home orders. 

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