The cost of COVID-19: Du Quoin awaits April sales tax receipts with great interest

Illinois's economic recovery from COVID-19 may be moving along a little faster than anticipated, but for the moment at least, Du Quoin Mayor Guy Alongi is sticking with his estimate that city could lose as much as $500,000 in sales taxes this year.

Gov. J.B. Pritzker says the state could move into Phase 4 of its COVID-19 recovery plan as early as June 26, which would allow businesses to open up to as many as 50 people at once.

But Alongi said until the city sees its sales tax figures from April, they can't accurately predict what the rest of the year will look like and how the city may have to adjust its spending.

Du Quoin's sales tax receipts from March came in last week, and were down only slightly from the norm, Alongi said. But the full extent of the stay-at-home order and business shutdowns wasn't realized until about the last week of the month, he said.

The April sales tax receipts will be the bellwether and tell a much more complete story. The city expects them to come in around July 6 or 7.

"I don't have a crystal ball," Alongi said. "But I'm still saying this (the coronavirus crisis) will probably cost the city a half million and I'm not coming off that until I see the numbers."

Last month, Alongi directed his city department heads to prepare three scenarios - what their departments would look like with dramatic 15%, 20% and 25% cuts. The departments are administration/finance; police; fire; streets; and sanitation, sewer and water.

Alongi said Thursday those reports were returned to him, but not every department head hit the required numbers. Now, he's going to wait until the April sales taxes come in before he goes back to the department heads for more precise scenarios.

Prior to the COVID-19 crisis, Du Quoin was taking in between $195,000 and $212,000 a month total from sales taxes, the home rule tax and the business district tax, or about 35% of the city's annual revenue. The city has about a $8.4 million budget.

In May, Alongi warned that COVID-19 could ultimately cost the city up to $1 million over two years. He said the city would make cuts to its spending to cover the losses - up to and including personnel, if necessary.

He said the city will work to make sure it doesn't have to raise taxes on citizens during this period, as residents are suffering serious financial effects from the shutdown as well.

But the economic fallout from the coronavirus could be "devastating" to the city, Alongi said last month.