Frankfort Predicts 7 Percent Reduction In Revenue

FRANKFORT, IL — The coronavirus pandemic has impacted the finances of cities and villages across the country. A large part of village revenue comes from sales tax, and when businesses were closed or had to change operations, revenues were impacted. In Frankfort, the village is predicting a seven percent shortfall for budgeted revenues.

In a recent video from the village of Frankfort, Mayor James Holland, Trustee Gene Savaria and Finance Director Jenni Booth discussed how the coronavirus has impacted Frankfort's finances.

Budgeted revenues for fiscal year 2021 in Frankfort include: $19,343,600 in the general fund, $470,800 in the capital development fund and $951,400 in the motor fuel tax fund. In the video, Booth focuses on the governmental funds of the general, capital development and motor fuel tax funds since those are the most impacted by the coronavirus.

Booth said expenses for the general fund are $16,085,000, so there will be a surplus of $3,258,600. General fund budgeted expenses include $7,912,000 toward police protection, $3,678,000 toward public works, $2,911,900 toward general government and $1,582,500 toward garbage disposal, according to the video.

Forty-three percent of revenue for the general fund comes from sales tax, according to the presentation.

The village recently received its July payment for April sales tax revenue, Booth said in the video.

"We received $538,869, which was 26 percent below our budget prediction," Booth said.

"We expect two months of poor sales tax revenue levels. By June, the restaurants were operating outside and by July, generally all retail businesses were open again," she said.

Booth said the village's best analysis shows it will end the year 13 percent short on sales tax revenues, or just over $1 million.

"At this time, we predict that our general fund revenues will be about $1,324,000 short of budgeted revenues at the end of the year," Booth said. "That's about a seven percent shortfall."

Savaria said the board budgets conservatively, and each department budgets more than they will likely spend.

"At this time, our capital fund balance is healthy. As long as our businesses can remain open and residents keep buying in Frankfort, we can manage our way through this financial setback," Booth said.

"It appears at this time that we can handle the reduced income with only minor impacts," Savaria said.

You can watch the video from the village of Frankfort below.