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Peoria City Council facing $31 million hole; cuts likely on the way

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PEORIA (WEEK) - The City of Peoria, now facing a $31 million hole to climb out of because of COVID-19. Tuesday night the city council discussed some potentially painful ideas to deal with that gap. Some of those including cuts that could impact public safety.

Peoria city manager Patrick Urich says the revenue from taxes is nearly 60% less than expected in some areas. Causing them to cut funding to some already. But now he says it's up to the council to find a way to fill that hole.

Tuesday during the first ever all virtual city council meeting, Peoria Mayor Jim Ardis described the city's dire financial situation.

"As much as we are hoping that our elected officials in Washington, D.C. are going to be able to help get the city some assistance, we can't count on it," he explained.

Expected revenue is falling short. So far the city is missing 1/7th of the budget, and cutting from police and fire is on the table. City Manager Patrick Urich says it's going to get worse than the $31 million they need to cut.

"We're going to have to probably double the size of those cuts in order to achieve the savings we really need to," said Urich in an interview prior to the council meeting Tuesday.

Right now, he's reporting over 30% losses in tax revenue generation. Property Tax revenue is down 5%. While local sales tax has dipped 39%, state sales tax down 34%, income tax minus 33%, corporate income tax is down 34%, hotel tax is minus 64%, and restaurant tax is down 54%.

The city has already cut 26.7 million from construction projects. Urich said can potentially cut back on landscaping and defer sewer rates.

But Urich said cutting 7 of 10 city jobs which would be necessary to fix the hole, just isn't feasible.

"We may not be out of the woods by May 1st. The council as the elected representatives of the people really need to decide what direction we need to go as a city," explained Urich.

And he says it's impossible to tell when we'll bounce back from this recession, saying it took almost 5 years back in 2008.

"This may be an l shaped recession where we never get back to the level of economic activity that we were at in the past," he added.

Second District Councilman Chuck Grayeb urged his fellow council not to overreact, to weather the storm and consider a loan instead of drastic cuts that could impact public safety.

"We are just beginning to recover from that (2008 Recession) as we are attempting to rebuild our city and bring our property values back."

Urich says the council needs to act fast. After a first reading tonight, he expects a decision on potential budget cuts within the next few weeks.

Kyle Beachy

Kyle Beachy is a Multimedia Journalist for 25 News and Heart of Illinois. Born and raised in Kokomo, Indiana, he attended Indiana Wesleyan University where he studied Education and played baseball. He comes to us from Columbus, Ohio where he received a Master’s Degree from The Ohio State University.

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