August 27, 2020 – Yesterday, we posted a story about Illinois municipalities seeing revenue shortfalls. We reached out to Jon Kindseth, Assistant City Manager, to see what Decatur has been experiencing. According to Jon, back in May, City staff estimated that COVID-induced revenue losses to the city’s General Fund would be about $5.4 million by the end of 2020. With internal and external variables changing, staff revised this amount in June to an estimated $5.6 million revenue shortfall. When revisited again in July, staff revised this amount again to an estimated $5.2 million revenue shortfall. Currently, City staff estimates the General Fund revenue shortfall will be somewhere between $5-5.5 million by the end of the year.
Motor fuel taxes were not included in the reductions because motor fuel tax is not a General Fund Revenue. Financial areas where the City is currently seeing it’s biggest losses in revenue are hotel/motel tax, food and beverage tax, and video gaming revenues, but it extends to generally any tax revenue relied on to cover services. The revenue from local use tax, which is generated through online shopping, is the only revenue projection that appears it will meet or succeed its budgeted projection.
The City took early steps in favor of cost reduction and, paired with additional grant reimbursements they have received or will receive prior to the end of the year, have estimated to reduce budgeted expenses in the General Fund by approximately $3-3.3 million. That leaves the estimation of a net loss to be around $2 million.
The City has reduced expenditures through voluntary furloughs, eliminating “non-essential” purchases, reducing staff through attrition and delaying capital projects where possible. The City is currently using work restrictions in an effort to improve and streamline services in order to seek permanent efficiencies.
