The COVID-19 economic shutdown threw the city of Peoria's once-balanced $218 million budget out of whack.
City manager Patrick Urich said lost revenues from taxes and fees will require the city to cut or borrow at least $31.5 million this year if the economy reopens May 1, as the governor's current stay-at-home executive order prescribes.
He said it will likely include both cuts and short-term borrowing, as the cuts-only option would require the city to lay off 70 percent of its workforce. That would include police officers, firefighters, and 911 dispatchers.
"The services that the city provides, the public services, are vital. And at this point, council needs to give us some direction on how far they want to reduce the budget this year. How do we want to look at what future borrowing may hold," Urich said. "And that borrowing doesn't come without a cost, either. We have to pay that back, as well."Various capital projects slated or already started this year will also be suspended to save money.
"I think that the challenge overall is that we don't know how long we're going to be in this situation where we've basically suppressed the economy, and we don't know what kind of recovery we're going to see," Urich said.
If the economy remains shut down until July, the city could stand to face more than $40 million in cuts and borrowing.
COVID-19 spurred revenue problems will persist into 2021, Urich predicts. The city will have about $1.7 million in Community Development Block Grant (CDBG) funds to reallocate for business and workforce recovery. The city will create a grant program similar to the one the state is running.
Urich is set to make a presentation on budgeting options at Tuesday's city council meeting. You can listen live at 89.9 FM or WCBU.org starting at 6 p.m.
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