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RR Donnelley closure forces city to rethink revenues

RR Donnelley closure forces city to rethink revenues

August 6th, 2013 in News

The closure of RR Donnelley's manufacturing plant in Jefferson City is leading officials to reevaluate their projections for the next fiscal year.

The plant's closure, a loss of nearly 500 jobs, was announced last week and city officials, already in the midst of budget planning, believe revenue estimates for the 2014 fiscal year will need to be lowered due to the impact on sales tax revenues. They also are bracing for long range consequences.

At the Jefferson City Council meeting Monday, Mayor Eric Struemph said the city is estimating revenue projections will need to be lowered by $50,000 to $100,000 for the next fiscal year, a task that will be taken up by the council Thursday.

The decrease in revenue projections is unwelcome in the already tight fiscal year where the city faces a $5 million drop from the current fiscal year.

But City Administrator Nathan Nickolaus said the consequences of the plant's closure will last beyond the next fiscal year. Nickolaus said RR Donnelley had substantial personal property, which is substantial tax revenue the city will lose in the 2015 fiscal year.

Randy Allen, president and CEO of the Jefferson City Area Chamber of Commerce, said the plant's closure was a surprise, noting a report from about three months ago where the company noted their workload was "higher than ever."

"We were shocked by this," he said.

Allen said the chamber and the state are working to help employees find new jobs and talk to the company about any possibility of saving at least part of the plant, though he said he's been told that's not the case. Allen noted he has not had any direct contact with the company so far.

The council will meet at 5:30 p.m. Thursday at City Hall to discuss the 2014 budget.