ROCKFORD — City officials have allowed open positions to go unfilled, paused capital purchases and eliminated travel expenses as the novel coronavirus pandemic wreaks havoc on city finances.
Finance Director Carrie Hagerty is projecting that in a worst-case scenario, Rockford would see a $17.7 million revenue shortfall.
“We will continue to monitor revenue and expense performance monthly and if we believe further action will be needed, we will make that recommendation to City Council,” Hagerty said.
Local governments across the region could face tough choices as the pandemic, business restrictions and high unemployment eats away local shares of sales, income and other taxes.
Because there is significant lag time for most municipal revenue streams, Rockford is only now seeing April tax receipts, the first full month under the state’s stay-home order that was issued at the end of March.
Hagerty said she expects the city, which had created a balanced $163.7 million budget this year, to see significant shortfalls in major revenue streams.
Rockford’s infrastructure sales tax collections are so far 11.8%, or $591,259, below the nearly $5 million expected at this time. Motor fuel taxes are also lagging expectations by nearly 9% as people drive less and purchase less fuel during the pandemic.
The city previously adjusted its Capital Improvement Program in response, scaling back some road and infrastructure projects and delaying a $1 million portion of plans to improve Alpine Dam until 2024.
Machesney Park Village President Steve Johnson said although the village relies heavily on sales taxes, it has not seen the extensive revenue losses other areas of the state have. Although it has an infrastructure sales tax used for road repair, no cutbacks are planned.
“We live and die on sales tax dollars,” Johnson said.
Winnebago County is anticipating a $7 million combined revenue shortfall in its $49.2 million general fund and $28.3 million 1% public safety sales tax fund.
Chairman Frank Haney said that estimate is likely to be adjusted upward once July and August revenues are analyzed.
“Although the county can cover the shortfall in the near term, this upcoming budget cycle will be brutal,” Haney said. “Adjustments on expenses will need to be made.”
Jeff Kolkey: firstname.lastname@example.org; @jeffkolkey