Gurnee tax revenue dropped $7.3 million during pandemic

The COVID-19 pandemic has cost Gurnee $7.3 million in sales tax revenue from the village's four top sources, the staff reported this week.

Finance director Brian Gosnell gave that figure Monday during his 16th and final COVID-19 financial update. Gosnell compared the revenue the village generated through sales, amusement, hotel and food and beverage taxes during the 15 months starting with March 2020 to previous receipts.

“I wanted to get a sense of what the pandemic cost, so to speak,” Gosnell said.

Gosnell began updating village leaders about once a month after coronavirus-related shutdowns started in March 2020. The question of how local businesses are doing is of particular importance to the village because it levies no local property tax.

To counter the drop in revenue, Gosnell said, the village cut budgeted expenditures by $4.5 million.

“It's pretty incredible when you think about being able to save, on pretty short notice, 10% of your expenditures,” Gosnell said.

The village instituted a hiring freeze, did not pay cost-of-living adjustments to employees, and suspended promotions.

Those savings, plus the $1.4 million in CARES Act funding the village received and savings from putting off some capital projects, mean the village used less money from reserves than expected. This March, Gosnell said the village would use about $4 million in reserves over two fiscal years. But on Monday, he said the village used $1.1 million from reserves last fiscal year and is planning to use about $922,000 of reserves in the current fiscal year. That means the reserve fund will be about $24.8 million, which is around 70% of planned expenditures.

Gosnell said the village isn't out of the woods yet, noting that it eventually will have to make up for the 18 months of capital projects that were postponed.

Looking ahead, Gosnell said the tax revenue stream is promising. The “big three” businesses — Six Flags Great America, Great Wolf Lodge and Gurnee Mills mall — have all reopened, and Illinois lifted most restrictions June 11.