JACKSON, Wyo. — Cautious optimism was the theme at Monday’s budget workshop session for the town.
Town manager Larry Pardee presented to the council a closing of the books for Fiscal Year 2020 and a peak ahead at what FY21 looks like. The good news amounted to some $12M in reserves at the end of FY20 which closed June 30, 2020.
Dire projections over sales tax and lodging tax revenue did not manifest at their worst. In fact, lodging tax collection, for instance, was down only 4% last June off June 2019.
Back in June, the town made deep cuts across the board—Fire/EMS, Police, Public Works, and START—but refrained from laying anyone off.
“To recap, we drafted a budget; COVID hit and we did a 180. We approved a greatly reduced budget for FY21,” Pardee told the council Monday afternoon.
At that time, staff’s projections were calling for a 50% reduction in tax revenue. May was slow, but visitation picked up by July. The latest sales and use tax numbers for April, May, June, July show sales and lodging tax revenues down but not nearly as bad as projected.
What the numbers also indicate is visitation remained fairly strong but buying habits did not. Other than online purchases—presumably by mostly locals—and big-ticket purchases like new and used vehicles, “people were not spending like they historically have been,” Pardee noted.
With so many unknowns about the upcoming winter ski season and especially with state funding, which is expected to be sharply curtailed, Pardee recommended a ‘take it slow’ approach.
“We don’t know what’s going to happen this winter with a potential reduction in skier visits. We want to be careful, strategic,” Pardee said.
Councilman Arne Jorgensen agreed about the need to anticipate less financial help from the state.
“It is crystal clear in my mind we will see a reduction in state funding. It’s important to keep this in mind moving forward,” he said.
Economist and councilman Jonathan Schechter felt somewhat optimistic about the upcoming winter season. He shared the latest Yellowstone visitation numbers, updated last weekend, that showed a 31% increase in traffic through the south gate.
“Visitation-wise, September is going to be stronger. We are getting a lot more people in here. But spending per tourist data has dropped off dramatically,” Schechter said.
Schechter pointed to the airline industry where optimism in high-end leisure travel bouncing back has 14 nonstop flights from different destinations coming to Jackson this winter. Alaska Airlines announced late last month it was adding nonstop flights to Jackson Hole beginning in December from Seattle, San Jose, and San Diego.
“Those were added without subsidies from the airport,” Schechter noted. “So the airlines are surprisingly bullish on winter. My personal view is we ought to be extraordinarily cautious about budgeting. It is prudent to focus on our budget amounts in FY21. But there are certainly signs we could be more optimistic than pessimistic.”
Town has been doing more with less so far. Hiring and wage freezes remained in place for the last four months of FY20. It has strained town hall but Pardee said it has been the right thing to do.
“It’s these times, these major downturns in the economy that forces staff to really innovate, collaborate, and sort of re-create or reimagine how we do what we do and try to figure out how to improve our delivery of program services. It’s challenging, but it is something we owe to you and the citizens of this community,” Pardee added.
