Amid the COVID-19 pandemic
and its affect on the economy, city governments have to be flexible
in their planning and spending.
In normal times, this is the period when city councils actively review and approve budget plans for their city governments for the coming year. But these times are not normal, with events almost daily laying waste to carefully-considered spending plans.
In Champaign-Urbana, for example, the COVID-19 crisis has forced city officials to reduce their tax-revenue estimates for the current year and the fiscal year that begins July 1. Champaign officials now anticipate a
$5.3 million reduction in revenue in the current year and $7.9 million next year. Urbana’s projected loss for next year is 10 percent less than the current year (about $5.26 million). And that is based on some kind of economic normalcy. But if the University of Illinois is suddenly forced to shut down in-person instruction and thousands of students quickly evacuate the community, those projections will worsen.
Likewise, in the aftermath of the murder of George Floyd and concerns about police mistreatment of blacks, there are calls to change how local police departments operate. These changes can’t occur overnight, but if indeed there are revisions in policing policies and increased spending on social services, that could require more spending by city governments.
For now, city officials in Urbana and Champaign are dealing with the revenue shortfalls by deferring pay raises, implementing hiring freezes, delaying the purchase of new vehicles for at least a year and reducing capital improvements spending. They’re also making use of budget reserves built up in better times.
But city officials have warned council members that they’re going to have to revisit revenue and spending numbers during the year and be prepared to make deeper cuts, possibly in areas involving direct services to residents.
This will be a difficult year (at least) for local governments, and maybe for citizens, too. Forewarned is forearmed.