Not only are sales taxes plunging but costs of preventing the respiratory disease are mounting, suburban leaders explained to House Majority Leader Steny Hoyer at an online forum hosted by U.S. Rep. Sean Casten Monday.
Glen Ellyn expects a 20% to 25% reduction in revenue over the next three to six months in the general fund, half of which goes to the police department, Village President Diane McGinley said…
Algonquin Village President John Schmitt said not only is the village shelling out for items like face masks but so far there’s been a 26% reduction in sales taxes revenues…
He noted Hanover Park is facing about $242,000 in COVID-19 expenses and a drop of almost $5.6 million in taxes.
If a retailer or business cannot open or sell at the same level as prior to the pandemic, this affects all sorts of outcomes. As noted above, communities have limited numbers of ways to fill this budget gap. They can look to governments above them – states, the federal government – but that puts their fate in the hands of others and that money may not come quickly or in sufficient amounts. In the short-term, this likely means putting off projects. Longer-term, it could mean some hard decisions about services and local amenities that suburbanites enjoy or think are essential.
The tax revenues might just be the tip of the iceberg; if retailers have to close (already an issue from urban shopping districts to shopping malls), this puts pressure on landlords as well as on communities to fill vacant space (already an issue in suburban communities whether filling big box locations or office parks) both to generate revenue and avoid the appearance of economic loss or blight. Local jobs are affected.
It will be interesting to see if these budget issues widen the gap between suburbs with a lot and those with less. There is already a bifurcated suburban landscape: some communities really struggling and some with a lot of resources, amenities, and status (and many somewhere in between). Those who have more can likely weather this storm better than the suburbs already struggling.