Duluth’s 2020 Projected Budget Shortfall Falls To $12 Million; 2021 Deficit Projection Announced

DULUTH, Minn. – There is some good news for the city of Duluth’s budget crisis related to millions of dollars in lost revenue this year because of the pandemic.

The projected 2020 budget shortfall that was once nearly $40 million in April and was decreased in June to $25 million is now projected to land around $11.88 million.

Duluth Mayor Emily Larson made the announcement Thursday night during a budget presentation at the city council’s agenda meeting.

Larson showed how revenues like tourism and sales tax dollars are doing better than expected.

She said of the shortfall the general fund is expected to fall short at $4.3 million by the end of the year. But she says that gap has been closed thanks in part to concessions from two of Duluth’s biggest employee unions (AFSCME and CDSA), voluntary pay cuts, closing facilities and $6.5 million from the COVID Relief Fund.

For 2021, Larson is expecting a budget deficit of $4.7 million, and she is looking to dip into the general fund reserves to pay for that loss next year — leaving around $5 million in the reserves.

For the mayor’s speech to councilors about the budget, click here.

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