As South Carolina sees new positive and presumptive cases of coronavirus daily, Charleston city and county officials aren't sure how it will impact their tax bases.
"From an economic perspective, our top concern right now is for all our citizens who are suddenly losing their jobs and businesses due to this crisis," city spokesman Jack O'Toole said on Wednesday. "With regards to the larger economic impacts, it's just impossible to know at this point."
Charleston County spokesman Shawn Smetana echoed the city of Charleston: "We don't have any sense on this yet, too many factors at this point."
College of Charleston economic professor Frank Hefner said all he and other economists can do is look for parallels between what is happening now and what has happened to the area before.
"This is so unusual; anyone that tries to put a number on it is really going to be shooting blind on that one," Hefner said.
The closest he could assess the current coronavirus effect on the economy is that of a hurricane, but even that doesn't quite capture how things may pan out. The state doesn't usually see a negative financial impact from hurricanes because people are leaving the coast and heading inland. From there they will continue to shop and dine and spend money.
"Areas that evacuate, the local stores lose a lot of retail sales, but people will need to buy from them a week later," Hefner said. "Hotels will lose room nights, restaurants will lose a few meals, so local governments end up losing some accommodations and local options sales tax. Now, we're multiplying that by five times, so it changes things."
Cities and the state don't experience a significant income tax drop during a hurricane. Hefner said some businesses see layoffs during hurricanes, particularly hourly pay employees, but it doesn't create a major issue for state government taxing.
"The unemployment insurance reserve, that could be a large number — larger than we would see in a business cycle," Hefner said. But it depends how long people are out of work. The last recession lasted about a year.
The other difference is after the pandemic there won't be a need to rebuild infrastructure, like it is after a hurricane.
Hefner said the main issue going into the pandemic was finding enough workers to expand operations and labor shortages. He said it doesn't even make sense to compare to China because Chinese officials waited longer to take drastic measures.
The only positive, Hefner said, was that January's unemployment numbers, both statewide and nationally, came in "great."
"We're entering this problem in a fairly solid economy," Hefner said. "This will slow the economy down there's no doubt about that — factories are closing, reducing output, stores are closing so there will be a significant change in the numbers that come out for March and April."