Mayor: Gurnee should be able to weather sales tax shortfall

Gurnee's revenues were down by 30% in May, June and July compared to the same time last year - a difference of about $3.3 million - because the ongoing pandemic has shuttered or hobbled the town's biggest revenue generators.

Though the Hurricane Harbor water park opened in late July, the Six Flags Great America theme park has yet to open for 2020. The pandemic also closed down Gurnee Mills, which reopened with safety procedures in place in late May.

Great Wolf Lodge officials plan to reopen to the general public on Monday.

The funds with among the sharpest year-to-year declines were the food and beverage tax, which is down 53%; the hotel tax, which is down 77.3%; and the amusement tax, which is down 80%.

"It's what you would expect with almost no activity out there for the months we're reporting on," village finance director Brian Gosnell said during a presentation to the board Monday night.

Mayor Kristina Kovarik said Tuesday she had expected the numbers to be even more dire.

She said the village will weather the drop thanks to the board's prudent budgeting over the years as long as numbers don't get worse.

"If it stays at 20 to 30 percent (less) we can weather that with the cuts we've made and with the reserves," Kovarik said. "It's hard to know if it is going to stay like this or if it's going to get better or get worse. We just faced so much disruption from so many different angles."

As a village that does not levy a property tax, Gurnee is more vulnerable to the ups and downs of the local economy than the average suburb. Just under half the village's general fund revenue comes from sales taxes.

The 2008 recession set the village back financially for about three years so village leaders began to set aside money each year for reserves. Thus, when the pandemic hit, the village had a $26.5 million emergency fund.

"We've been very diligent about socking money away every year to build up those reserves," Kovarik said. "We never thought we'd use them for a pandemic."

Among the cuts made by the village this spring was a suspension of the annual cost-of-living adjustment that usually goes into effect for village employees in May. Planned work has been postponed, and a hiring freeze has been implemented. Board members also took a 50% pay cut in solidarity.

Kovarik said village officials will continue to keep a close eye on every penny going out and look forward to getting more data to see if a rebound may be coming.

Gosnell said the initial numbers for August look better. He said he expects the amount of money generated by the hotel tax to increase because the Navy continues to house hundreds of recruits at Great Wolf Lodge and other Gurnee hotels as part of a new quarantine procedure before sending them to basic training at Naval Station Great Lakes.

Gosnell said he saw positive trends in the food and beverage tax as well.