Ferguson suffers budget fallout from Michael Brown shooting

FILE - In this March 11, 2015 file photo, Ferguson Mayor James DEView photo

FILE - In this March 11, 2015 file photo, Ferguson Mayor James Knowles III speaks during a news conference in Ferguson, Mo. Ferguson city leaders project a $2.5 million budget shortfall during the current fiscal year and a similar shortage in fiscal 2016, largely due to unrest and fallout after the fatal police shooting of 18-year-old Michael Brown. Knowles told The Associated Press on Thursday, May 21, that layoffs or significant cuts are unlikely. (AP Photo/Jeff Roberson, File)

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FERGUSON, Mo. (AP) — Ferguson city leaders project a $2.5 million budget shortfall during the current fiscal year and a similar shortage in fiscal 2016, largely due to the unrest and fallout after the fatal police shooting of 18-year-old Michael Brown, the town's mayor said Thursday.

Mayor James Knowles III said several businesses damaged or destroyed in the riots have not returned, so sales tax revenue is about $400,000 less than budgeted. The city voluntarily agreed to reduce the amount of money collected through the municipal court. Beyond that, police were issuing few tickets in the months after the shooting because they were too busy dealing with protests, Knowles said. As a result, municipal court revenue for the current fiscal year is expected to be $1.2 million — about half of what was projected.

Knowles said layoffs or significant cuts are unlikely because the city had some $8 million accumulated from fiscal management over the last decade, which will be used to help meet the shortfall. He said city leaders, currently working on the budget for the fiscal year that starts July 1, will look at ways to save money such as not filling some job vacancies.

"We'll have to tighten our belts significantly," Knowles said.

Brown, who was black and unarmed, was fatally shot by white police officer Darren Wilson on Aug. 9. The shooting resulted in protests, some violent, that lasted for weeks, spurring a national "Black Lives Matter" movement. When a grand jury in November declined to prosecute Wilson, unrest escalated again, with several businesses looted or burned.

The U.S. Department of Justice also declined to prosecute Wilson, who resigned from the police force in November. But in a separate report in March, the Justice Department found evidence of racial profiling among police and a profit-driven municipal court system.

City leaders are meeting with the Justice Department as they seek an agreement for changes to the way Ferguson's municipal government operates.

Knowles said it is unclear how long negotiations with the Justice Department will take. The legal cost and other costs associated with the negotiations are expected to reach $500,000.

Despite the financial hardship, Knowles is optimistic.

Some businesses that left have been replaced. A condominium and commercial development is about to get started. Plans call for redevelopment of West Florissant Avenue __ the site of many protests — which should bring in new businesses.

"If that's the way we're going to continue, not only is the worst behind us but great days are ahead," Knowles said.