The COVID effect: City of Du Quoin anticipates big revenue drop

The city of Du Quoin has started planning for a grim financial future in the wake of the COVID-19 pandemic, as it expects precipitous drops in sales tax revenue to begin as early as June.

Mayor Guy Alongi said the city needs to prepare for a potential loss of between $500,000 and $750,000 this year and as much as $1 million over two years.

Du Quoin's department heads are each in the process of developing three scenarios - what their departments would look like with 15%, 20% and 25% cuts. The departments are administration/finance; police; fire; streets; and sanitation, sewer and water.

"We're going to meet this thing head on," Alongi said Wednesday, "and not bury our heads in the sand."

He said the city is working to make sure it doesn't have to raise taxes during this period of slow sales taxes, as residents are suffering serious financial effects from the shutdown as well.

But Alongi didn't mince words.

The economic fallout from the coronavirus could be "devastating" to the city, he said, and the city needs to figure out how to address that.

He did not rule out cuts to the city's payroll. Du Quoin currently employs 35 full-time personnel and some part-timers.

"At this point I can say everything is on the table," he said. "We have to make sure we can continue services without interruption," and determine how many personnel are needed to make that happen.

Alongi said the city has already cut $84,000 out of the administration budget, by not recalling two grass cutters, laying off a part-time employee in the office and cutting ties with a lobbyist the city used to advocate for its interests.

"We will know in June how hard we have been devastated in our budget," Alongi said.

Even when the restrictions to business are lifted, he added, "the economy is not going to open up like water flowing through a hose.

"You can't take the attitude this will go away," he said. "Sales tax will come back a little at a time. It may never entirely come back."

In hard times, he added, people do not spend money on non-essentials.

Alongi said the city's 2020 budget will probably have to be reduced by the same amount as the sales tax losses.

"We don't have that much in reserve," he said, adding the city has worked hard to build up those cash reserves.

"The reserves that we have attained over the last five years, I don't want to go out the window in less than a year because we couldn't cut where we needed to cut," Alongi said.

He added he's willing to spend some of the reserve as needed, as long as it isn't being used to prop up ongoing expenses.

Meanwhile, the Perry County Board recently discussed enacting a voluntary furlough program for county employees. Commissioners will continue the discussion at their May 7 meeting.