"People aren't spending their money," Molgaard said.
The majority of B&O tax revenue comes from retail, services and contractors sectors, Estep said. The service sector -- professions such as doctors, lawyers and accountants -- brought in $215,000 less revenue than in 2012, contributing to the shortage, according to Estep.
The financial outcome of the B&O tax is difficult to gauge at this point, Estep said.
"Because that's a quarterly, self-reported tax, we're not going to be able to tell how the July, August, September business period went until we collect those taxes," Estep said. "It'll be mid- to late November before I have any feel of what this quarter's going to look like."
Hotel/motel tax revenue in Charleston is also falling short by about $140,000 compared to June through August of last year, according to Estep.
Molgaard said the city is looking to long-term solutions to low revenue issues by continuing "to monitor our revenue situation, but we are also closely looking at our expenditures."
"We know our obligations are going to increase," Molgaard said, making reference to the city's unfunded liability to police and fire pensions. "We're going to have to do business more efficiently and effectively to meet our obligations."
This shortfall in revenue could be temporary, but, for now, the city is playing it safe with its finances, Molgaard said.
"We don't know if it's just a dip that will correct itself or that it will continue," Molgaard said. "Right now, I think we've got enough room in our current budget to absorb this current downturn."
Reach Rachel Molenda at rachel.mole...@wvgazette.com or 304-348-5102.