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Mayor’s memo

COVID-19 impacting government budgets nationwide 

By Mayor Tim Busse

The coronavirus pandemic has created the largest economic downturn since 2008’s Great Recession. Businesses have closed, people have lost their jobs or been laid off and many industries have come to a grinding halt, one of those being the tourism industry. In Bloomington, that has translated to millions of dollars lost from lodging and admissions taxes, mostly paid by people who come to Bloomington and are not residents.

Bloomington’s hospitality industry is a multibillion-dollar economic engine for the state of Minnesota and about 20% of the City of Bloomington’s tax base. Lodging tax revenues from the more than 9,000 hotel rooms in the city and admission tax revenues from entertainment venues such as Nickelodeon Universe usually generate about 12% of the City’s general fund revenues, which fund City services, including essential services like Police, Fire and Public Works.

We felt a larger impact locally in 2020 because Bloomington relies on tourism as a major contributor to the budget, and 2021 and 2022 will continue to be challenging years. 

According to the National League of Cities’ annual budget report, nearly eight in 10 finance officers indicate that their cities are less able to meet the financial needs of their communities in fiscal year 2020 than they were in fiscal year 2019. This jumps to about nine in 10 cities reporting “less able” when asked to anticipate their budgetary capacity for fiscal year 2021. To give you a sense of what this number is in a usual year, only 24% of finance officers reported that their city was less able to meet fiscal needs in 2019 than 2018.

Bloomington has been very fortunate to have a broad base of revenues combined with a long history of sound financial management. The City is not as dependent on property taxes as other cities, which represents about two-thirds of general fund revenues. These are reasons why Bloomington is one of only 40 cities nationwide to receive three triple-A credit ratings and why only an event of this magnitude could affect the City’s financial situation to this extent.

Since March, City staff have proactively worked with the Public Health Division to understand the pandemic and with Finance staff to identify the extent of the budget shortfall. We’ve made residents more involved than ever in budget development by convening a Community Budget Advisory Committee, read more below. The committee will help resident voices come to the forefront of planning for the 2021 budget. Be sure to let us know what you think at Since the pandemic began I’ve witnessed countless examples of how strong this community is and how much we care for each other. I know that, if we work together, we can meet this budget challenge and be stronger than we were before.