Southern Illinois counties deal with funding shortfalls

BENTON, Ill. (AP) - Franklin County, like Williamson County, is trying to find ways of mitigating lost tax revenue because of closures and reduced travel in the wake of the COVID-19 pandemic.

COVID-19 has forced the hand of many governors in the U.S. to issue stay-at-home orders and to shutter non-essential businesses to reduce the spread of the deadly virus. In Illinois, it started in mid-March.

Counties across the region (southern Illinois) have felt the squeeze of reduced spending and declining tax revenues.

In an April 21 meeting, the Franklin County Board met to discuss where the county was at and what measures could and should be taken to stem the loss.

'œWe need some cash infusion pretty quickly,'ť Steve Vercellino, the county's treasurer, said when announcing a proposed tax anticipation warrant, which allows the county to borrow against anticipated tax revenue.

He proposed the TAW with an interest rate of 2.75% to be paid in this calendar year, likely in the last week in December.

Earlier in the meeting, there was talk of federal stimulus monies potentially available to governing bodies. U.S. Rep. Mike Bost, R-Murphysboro, sent a representative to the meeting to discuss, but it was unclear how much and when this money could materialize.

Newly-elected board member Larry Miller spoke of deep concerns he had with the money talk Tuesday.

'œWe've not made any adjustments whatsoever,'ť Miller said.

He was blunt in his read of the county's tax problem: Changes in personnel were needed if savings couldn't be found to make up the tax shortfall. He said the county's juvenile detention center might be a place to look for this savings. The center is operated by the Second Judicial Circuit, but largely paid for by the county.

'œI think it's time we start implementing some furloughs,'ť County Board Chairman Randal Crocker said, adding that the board was already in talks with union officials.

Williamson County found itself in a similar discussion the day before. It was decided that the county needed to furlough nearly 50 employees in order to soften the blow of the estimated double-digit tax revenue shortfall from the COVID-19 crisis. County officials told The Southern that this was all in an effort to minimize the impact on the county's reserves.

Board member Ron Ellis said the choice was to furlough employees now or make up the lost revenue next budget year with budget cuts and layoffs. Fellow board member Brent Gentry said with current expanded unemployment benefits, some employees might come out ahead by taking furlough.

On their end, Crocker said talks have been ongoing for several weeks as the COVID-19 situation has intensified. County officials are not able to force furloughs on officeholders, but they can lay out the facts for them - if savings aren't found, there might have to be a budget adjustment that diverts office funding to make up the lost revenue. Crocker said all the parties have been understanding.

'œThey understand the concerns and the need and financial picture,'ť Crocker said.

Unlike Williamson County, however, Franklin County board members also have to consider the recently-approved sales tax increase to support the building of a new courthouse. After the third attempt to sell voters on the idea of increasing taxes, albeit by 1% for a limited time, to replace its crumbling, but historic courthouse, voters gave the OK in April 2019.

But, with declining sales tax revenue, questions have been hurled at the board about what it means for the courthouse. Will the life of the tax need to be extended? The short answer, Crocker said, was no.

He said when county officials structured the bond sales for the project, they factored in a 25% buffer. Crocker said if taxes came in on trend, and early reports showed they were up until the COVID-19 crisis, they could pay the loan off three to four years earlier than the 15-year term. However, if there was a 25% downturn in revenue for the life of the loan, Crocker said the county would still be able to pay on time. Essentially, he said there was wiggle room built in to account for a downturn like what the county is seeing now.

In Jackson County, though, things look a bit different. Keith Larkin, the board's chairman, said during an late April meeting Tuesday night the board approved the job description for a new, full-time position. Larkin said this would be a temporary employee whose sole job would be to monitor grant and stimulus opportunities for county residents and the county's government.

Larkin said the grants have been 'œa cash grab'ť with application slots filling up fast.

'œI think we had an idea that if it wasn't somebody's full time job it would get missed,'ť he said, estimating that the position would make about $30,000 a year, which, if the employee were successful, could pay for itself in the extra funding coming in.

'œTime is of the essence on this,'ť he said.

When asked about the potential for furloughs at the county level, especially in light of other Southern Illinois counties taking them, Larkin said Jackson County is not a place they would need to do that.

'œWe don't have anyone sitting around twiddling their thumbs,'ť he said. Everyone being paid is working right now. However, he said had the county not restructured its employee health benefits last year to save money, they might be looking at furloughs.

Discussing the county's financial situation, Larkin said it 'œcertainly looks serious, but I would not say dire. Any revenue missed is a problem,'ť he said. 'œI don't think it's something we can't overcome.'ť

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Source: The (Carbondale) Southern Illinoisan, https://bit.ly/351YWCX