Mayors ask Congress for aid with plummeting tax revenues

  • Hawthorn Mall in Vernon Hills emptied out in March after a stay-at-home order to prevent COVID-19 went into effect. The economic hit is causing municipal revenue to plummet.

      Hawthorn Mall in Vernon Hills emptied out in March after a stay-at-home order to prevent COVID-19 went into effect. The economic hit is causing municipal revenue to plummet. Paul Valade | Staff Photographer

 
 
Posted5/13/2020 5:14 AM

The suburbs are losing millions of dollars in tax revenue and need unfiltered funding to climb out from under losses caused by COVID-19 and prevent layoffs, local mayors told the No. 2 U.S. House Democrat this week.

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.

"This calendar year, the village operating revenues could take a $2.5 million to $4.5 million hit," she told Hoyer.

The village has instituted a hiring freeze, laid off golf course and restaurant employees, and expects to soon implement furloughs and "strategic" layoffs, McGinley said. Next year, more layoffs are planned.

A more than $3 trillion COVID-19 aid package unveiled Tuesday by Speaker Nancy Pelosi would provide about $1 trillion for states, counties and municipalities.

"The magnitude of the problem is so great, we need to provide substantial, additional help," said Hoyer, a Maryland Democrat.

It's expected the Democratic majority has the votes to pass the bailout but an uncertain fate awaits it in the Republican-controlled Senate.

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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.

"We asking for a couple million dollars to help us through the short term," to pay for critical services like fire and police, Schmitt said.

In St. Charles, "we're looking at between 5% and 20% loss of revenue," Mayor Raymond Rogina said. He urged lawmakers to allocate grants directly to municipalities without a middle man and other leaders agreed.

"The dollars need to come directly to municipal government; we're where the rubber hits the road," Hanover Park Rod Craig said. When federal funds are channeled through states, "it's not coming to our level," Craig said.

                                                                                                                                                                                                                       
 

He noted Hanover Park is facing about $242,000 in COVID-19 expenses and a drop of almost $5.6 million in taxes.

The House is "in the last stages of putting together the bill," Hoyer said, adding a vote could occur Friday.

The bill will offer some direct funding to towns. "We want as few strings attached as possible."

Senate Leader Mitch McConnell has indicated there's no urgency to seize upon the Democrats' bill; senators might not vote until after the Memorial Day break.

Casten, a Downers Grove Democrat, noted "states like Illinois have been historically disadvantaged by funding formulas that over-prioritize low populated states.

McHenry County Chairman Jack Franks and Port Barrington Mayor Shannon Yeaton also commented during the meeting. A total of 30 leaders participated, Casten's office said.

• Daily Herald wire services contributed to this report.

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