(The Center Square) – A new survey paints a bleak picture for Illinois communities and their budgets with local leaders facing tough spending decisions in the coming months.
The Illinois Municipal League says 87 percent of municipalities face revenue shortfalls of 20 to 30 percent compared to last year because of COVID-19.
“That is a pretty big number. I mean that is almost everybody,” Illinois Municipal League Executive Director Brad Cole said. “Not everybody has sales tax, or hotel-motel, or motor fuel tax revenue that is significant, so even the very small communities are saying they are going to see losses and it’s going to be a problem for their budgets.”
The survey included results from 227 municipalities across the state. Municipalities reported shortfalls across several categories that usually generate tax revenue, including sales taxes, gaming taxes, motor fuel taxes and income taxes.
Cole said communities will be forced to make difficult decisions.
“They really only have a couple of things they can do, increase revenues or decrease expenses,” he said. “The increase revenue option is to raise taxes, which nobody wants to do, and the decrease expenses option means they have to cut programs and services or likely personnel.”
Peoria is one example. Peoria leaders are facing a $54 million budget shortfall. Documents show that the 2020 budget was initially balanced, meaning local elected officials could have to cut millions of dollars in spending. That could include layoffs and salary reductions, cutting support for the Peoria Civic Center, among other things.
The report said that “the survey results show the extreme impact that COVID-19 has had on municipalities throughout the state. The varied size and location of municipalities, as well as the relative prevalence of the virus, showed how difficult it is to provide one-size-fits-all policies related to a global health pandemic.”
Cole said without direct financial assistance from both the federal and state government, this will create a ripple effect for years to come.