Koos: Bloomington-Normal well positioned to withstand potential recession
Normal Mayor Chris Koos is pleased with the picture created by the annual financial trends report for the town, noting that revenues are strong in income tax, sales tax, and online sales tax reimbursement.
And Koos said the hot real estate market has had a good effect even on homes that have not changed hands.
"Property values have gone up. The township assessor makes those decisions and there was a multiplier of 5.99% on all properties in the town of Normal," Koos said during WGLT's newsmagazine Sound Ideas. That is part of the re-assessment that takes place every four years.
The insurance cost for the Town of Normal is one of the few negative financial indicators the municipality faces. The annual trend report showed it has been a problem for the last six years.
"The Class A drugs, the new drugs that are out there that people are being prescribed, the prices just continue to go up and up and up," said Koos.
The report also said the town is still working through cost increases caused by people putting off doctor visits during the pandemic.
"We work with a group brokerage and we are constantly watching it and trying to figure out ways we can keep these costs under control," said Koos.
Fund balances started falling significantly in 2017, slipping from an average above $2 million. Last year, the town insurance fund balance dipped to just $340,000, and the town had to give its insurance fund about a $1 million subsidy this year to keep an adequate balance.
Koos said the town is well positioned to withstand a potential recession. The annual trends report took a marked turn for the better from the previous year — he said there were 24 positive indicators this year compared with 19 last year.
"A nationwide recession is going to have an effect, but there is so much activity happening in this community, I think it will have less effect on the people living in Bloomington-Normal than it will nationwide," he said.
Historically, conventional wisdom was Bloomington-Normal was likely to be later in and earlier out of many financial downturns. State Farm growth years and the fact that education and insurance are not particularly susceptible to economic downturns was the main reason for that. More recently, that insulation has become thinner as state budget standoffs, the end of State Farm expansion, and the real estate bubble pop that caused the Great Recession affected the Twin Cities.
But Koos cited Rivian hiring and the Phoenix Industries expansion of an industrial park on the north side of town in support of his opinion the local economy is healthy enough to withstand this potential recession. He said the county labor force has reversed a seven-year decline as baby boomers filtered out of their working years. He said only motor fuel tax receipts are flat.