Hoffman Estates' revenue losses during pandemic not as bad as projected
A second wave of the COVID-19 pandemic was not part of Hoffman Estates officials' financial projections, but they're better prepared for it because revenues are not down as much as anticipated in the spring.
Though the economic downturn has taken a toll on revenue from the village's hotel tax, building permits, entertainment tax, interest income and natural gas utility tax, other revenue sources such as the real estate transfer tax, local use tax and income tax have proved surprisingly resilient and are ahead of projections.
Acting Village Manager and Finance Director Rachel Musiala told the village board this week that the $6.5 million revenue shortfall once projected for this year is on track to be only $4.5 million.
The village board already has approved $3.5 million in cuts this year to meet the originally projected shortfall halfway.
The higher than expected revenues will either reduce the amount of reserves the village will need to balance its 2020 budget or put Hoffman Estates in a better position to weather the second wave of COVID-19, Musiala said.
"So we're moving in the right direction, but as a reminder, our original projections did not anticipate a second wave of the pandemic, and as we all know it appears that may be happening," she said. "So I feel like we're in a good position going into the upcoming months, so that we should be able to hopefully end the year where we originally projected -- the $6.5 million, depending on what happens over the next couple of months because of the second wave of the pandemic."
Hoffman Estates received a $426,000 grant through Cook County under the federal Coronavirus Aid, Relief, and Economic Security Act to cover some personnel expenses and PPE purchases, Musiala said.
That grant was not among the revenues projected during the spring, she added.