Revenue and spending slashed in new $63.6 million Mundelein budget
Reacting to the economic crisis caused by the COVID-19 pandemic, Mundelein officials have slashed spending for the 2021 fiscal year.
The village board last week adopted an estimated $63.6 million budget for the year, which began May 1. That's down nearly 10% from the previous year's $70.4 million final spending plan.
Projected revenue from property and sales taxes, fees and other sources is about $52 million for the new fiscal year. That's down more than 38% from the 2020 fiscal year's final $84.2 estimate.
Some revenue categories are projected to take big hits because of the pandemic.
For example, income tax dollars from the state are expected to drop from nearly $3.4 million to $2.7 million. Likewise, revenue from parking fees at the village's train station is projected to drop to $30,000 from the 2020 fiscal year's estimate of $60,000 because fewer people are taking public transportation.
Grants are expected to drop from $305,000 to $150,000 this year, too.
"The COVID-19 pandemic has dramatically impacted Mundelein's budget and bottom line," Mayor Steve Lentz said in a news release. "The loss of tax revenue will make it very challenging for us to accomplish our goals, but we have a plan for a viable path forward."
Revenue also is dropping because Mundelein borrowed $35 million last year for some costly projects that are continuing this year, Finance Director Doug Haywood said. That income isn't included in the new budget.
The revenue decreases are being partially offset by a property tax increase approved in November to help pay for road improvements and pensions, Village Administrator John Lobaito said, as well as a 3% local tax on cannabis sales that starts July 1. Additionally, sales tax dollars continued to flow into the village from grocery stores and home-improvement stores that didn't close during the statewide stay-at-home order, Lobaito said.
On the spending side, the budget includes $23 million for various capital improvement projects, including an estimated $8.2 million for a flood-prevention effort in the Western Slope neighborhood near Route 45 and Division Street.
The budget also sets aside $1 million to complete construction of a new public works and engineering facility on Allanson Road and nearly $5 million for street improvements, among other efforts. Most of the public works and engineering facility project was funded in the 2020 budget.
To help businesses hurt by the pandemic, officials have earmarked $100,000 for a proposed promotional campaign that will encourage people to shop locally.
The roughly $11.8 million gap between projected spending and revenue will be bridged with some of the funds the village borrowed last year, Haywood said.
Trustee Dawn Abernathy said officials will have to revisit the plan in six months to see how the village's coffers have been affected by the business closures, rising unemployment and reductions in personal spending caused by the pandemic.
"We're making guesstimates now," she said. "Until we get something on paper, we won't know exactly how COVID has affected us."