Rapid City is not hiring city employees starting May first. The City is implementing a temporary freeze to save money after sales tax collections came in lower than expected.
In a letter to city aldermen, Mayor Steve Allender says people simply aren’t traveling or spending as much money this year. That’s prompting a revenue shortfall in city coffers.
City departments will have to wait at least thirty days to replace people who resign, retire, or get promoted… depending on the department, some positions may remain open for three months.
Allender says he prefers this option to balance the budget.
“We have a couple of options, we can wait and see what happens, balance the budget with reserves, that type of thing," Allender says. "But I think the right thing to do is take some smaller, corrective measures now to get us on the right course to balance this year’s and next year’s budget naturally, as opposed to applying some radical budget treatment in a crisis.”
For the first two months of 2017, sales tax collections are down over two percent from 2016. Last year collections came in about $180,000 short.
Allender says the state’s rebound since the Great Recession is strong, but that could be changing.
“There’s a great chance that this is simply an adjustment in our recovery," Allender says. "It could last six months, it could last twelve months. We would be fools not to take some action just in case it is something that has some staying power and there’s a real deeper problem that we don’t yet understand.”
According to a Rapid City press release, the hiring moratorium could save about $340,000.