Virus' impact on business causing uncertainty for Schaumburg budget planners
The shuttering or slowdown of so many tax-producing businesses means Schaumburg's nearly completed, monthslong budget process has virtually started over in recent weeks and makes forecasting the village's financial future more difficult.
"I would say difficult is an understatement," Village Manager Brian Townsend said. "This is unprecedented. We've never seen anything like this before."
Economic analysts are predicting the impact of the COVID-19 pandemic to be worse than that of 9/11 and the Great Recession combined, Townsend said. Schaumburg has never experienced the complete closure of Woodfield Mall or the village's convention center since either were built.
But the goal of village officials, even as they scramble to produce a more up-to-date and accurate annual budget for village board approval this month, is to keep Schaumburg a viable and unique community with a high quality of life, Townsend said.
"The only thing that's a saving grace for the village right now is all the financial planning we've done in the past," he said.
That includes not only $38 million in reserves but also each village department's traditional recommendation of 2% of costs that could be cut in an economic downturn. That already was included in the original version of the pending budget.
The current budget, which took effect May 1, 2019, was balanced at $255 million in costs and revenues. With so little time to adapt, it's now inevitable the fiscal year will end April 30 with a deficit, Townsend said.
Mayor Tom Dailly said the best solution is to adapt in the new budget, which trustees will be asked to approve on April 28.
"As far as I'm concerned, this (budget) year is done," Dailly said. "What's done is done."
While Dailly hoped to see an additional $2 million spent on road repairs in the coming year, he said he will not be surprised if that is delayed a year.
Townsend said every effort is being made to avoid layoffs, but he's not yet able to call that a certainty.
The recommended budget, to be delivered to village board members on April 16, also will remain silent on a recommended property tax levy.
The speed and nature of the economic recovery that follow the coronavirus outbreak will determine much about the year ahead, Townsend said. Instead of a single midyear budget adjustment, the village board may revisit Schaumburg's financial plan much more regularly.
"This won't be a V-shaped recovery. This will be a slow climb," Dailly said.
Townsend agreed.
"So much of our economy is based on people spending money," he said. "If people are unemployed, they don't have the money or confidence to make those purchases."