Illinois Cities Face Revenue Shortfall, Ask Feds For Help

Aug 27, 2020

Nearly 200 cities told the Illinois Municipal League that they expect to bring in less money from taxes on shopping, gaming, gas and other sources due to the coronavirus pandemic. The responses come from a survey conducted between June and July.

Cities expected a median reduction of 20% to 30% in their revenues compared to last year, according to the survey. Nearly half the respondents said they are considering laying off staff or reducing services in order to address budget shortfalls.

On a virtual event hosted by Springfield’s mayor, Brad Cole, executive director of the Illinois Municipal League, said the results are what he expected to hear. Cole said they’re lobbying the federal government to ask for help.

“To get more direct municipal aid that would allow for reimbursement of lost revenue, those motor fuel tax, hotel-motel, sales tax... that’s where you’re really going to have a budget hole that’s going to be hard to plug,” he said.

Decatur Mayor Julie Moore Wolfe said layoffs and furloughs are the last thing she wants to consider, but may have to. She said her central Illinois city is facing a $5.5 million revenue shortfall.

“If we don’t get help in a major way, I don’t know how we recover,” she said. “I can’t tax my citizens more. There’s just no more money to come back to us.”

Springfield Mayor Jim Langfelder and North Chicago Mayor Leon Rockingham, Jr. described similar situations in their cities.

Springfield could see between an $8.7 million and $14.3 million drop in revenues next fiscal year, according to a budget presentation from last week.

Rockingham gave one example of how the pandemic is affecting city revenues, specifically from hotel taxes. He said weekly graduation ceremonies at the Naval Station Great Lakes, near North Chicago, would fill hotel rooms in the city. Without the in-person graduation ceremonies, the city no longer gets that revenue.

“All the entertainers, all the restaurants are affected by the fact that every weekend that was their source of revenue to maintain their restaurants,” he said.

Springfield is seeing similar trends, as legislators didn’t travel to the capital city for session this spring, the State Fair was canceled and the normally busy summer for tourists is slow.

The first coronavirus aid package earmarked money to governments specifically to pay for costs associated with addressing COVID-19. The Illinois General Assembly allocated $250 million of that money for city and county governments outside of Chicago and its suburbs. Chicago and the collar counties got a separate allocation of funds.

Local governments can start applying for grants this week. But Cole said that cities have not yet seen the federal money. A spokeswoman for the Department of Commerce and Economic Opportunity blamed delays in part on the IML’s efforts advocating for more funding.

Cole acknowledged there had been disagreement with the state over how and how much of the federal dollars would be given to cities.

“We wish we could have gotten more of that out,” Cole said.

The amount of money for each local government is determined by population counts. For example, Springfield is eligible for up to $4.8 million to cover things like overtime costs for first responders and purchases of personal protective equipment to deal with the pandemic between March and the end of this year.

The money does not cover lost revenue, which is what Cole and others are lobbying for in the second federal aid package.

U.S. Sen. Tammy Duckworth, an Illinois Democrat, said she backs the push and there is some support from the White House. Democrats in the House of Representatives approved a plan that would give billions to states and cities around the country. But Duckworth said the plan hinges on getting Republicans to agree.