Aurora Facing $35 Million Budget Shortfall Due To Coronavirus

AURORA, IL — Aurora city leaders are formulating plans to fill a potentially huge hole in the city’s budget due to the coronavirus pandemic. Chief Financial Officer Martin Lyons told the Aurora City Council that Aurora could be facing a $35 million budget hole, with uncertainty over when and how much tax revenues will be collected this year. The city council approved a $477 million budget for 2020 in December.

The city has yet to see the effects of the state’s coronavirus lockdown on taxes, Lyons said, as the state is only now reporting data on sales tax collections from January and income tax collections from February. The financial impacts of the coronavirus will likely become more clear between mid-May and mid-June as data becomes available on tax collections in March and April, Lyons told the council.

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City officials should expect to collect less taxes than 2019 for more than six months this year, Lyons said, though he added “2019 was a great year” during which the city exceeded budget estimates for revenues.

“We won’t repeat that in 2020, and it’s unlikely — according to any projection — that we will repeat it in 2021, so we will have to plan accordingly,” Lyons said.

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Officials must lower their expectations for the amount of tax revenues they will be able to collect, Lyons said. Most years, the city collects 99 percent of billed taxes, but this year, it’s likely to be closer to 90 percent, Lyons said.

“We need to think that way because there could be some people who just can’t make their property tax payment,” Lyons said.

Some projections are showing it could take about 18 months to recover from the economic downturn brought on by the coronavirus, Lyons said.

Property Tax Late Fees Waived By Kane County Treasurer

Kane County Treasurer David Rickert has waived late fees and interest penalties for property owners who pay the first installment of their bills by July 1. Rickert’s office started mailing tax bills on May 1. In April, Rickert said Kane County is expecting to lose $124,000 in revenues due to the pandemic.

City officials are “testing the waters” and exploring ways to use locally controlled funds to support operations, but money from the Motor Fuel Tax and pension funds cannot be used, Lyons said.

“We asked about 10 different ways to Sunday to try and find out if we could use MFT (funds) for Public Works salaries, for instance, and the answer was a solid no,” Lyons said.

To curb costs amid the coronavirus pandemic, the city has stopped hiring for new positions until at least June 1, though some city employees are being promoted to fill critical jobs, Lyons said. The city has also suspended spending on its capital improvement plan and the city council is holding off on approving nonessential spending.

Lyons said officials are also looking to manage the city’s debt by delaying debt-reduction payments or borrowing on a short-term basis.

“We’re not borrowing to avoid tough decisions, but if we don't have to have a major decrease in service provisions that is mirroring this revenue issue, we’d like to avoid that,” Lyons said. “We’d really like to smooth over this period with some strategic decisions on how we might take the $35 million revenue loss and do what we do with pensions — spread those over three or four years — so we can really keep our operations at the highest level possible.”