COVID-19 affects Springfield tourism, travel, city and state finances
Editor’s note: A Year of COVID-19, The State Journal-Register’s in-depth look at the pandemic’s impact on our lives, continues through March. Watch for stories of challenge and triumph, ingenuity and perseverance, survival and lives remembered.
Springfield’s hotel occupancy rate in January was 27.2%, the lowest monthly rate ever recorded since statistics began being kept almost three decades ago, and the rate was 16 percentage points lower than the same month in 2020.
The statistics were emblematic of the COVID-19 pandemic’s impact on Springfield as a travel and tourism destination.
“It’s been devastating over the past year,” said Scott Dahl, director of the Springfield Convention & Visitors Bureau.
So devastating, he said, that 3,100 of the estimated 3,500 jobs in the capital city’s tourism industry — from hotel workers to meal servers at conventions and downtown restaurant employees — evaporated in 2020.
The pandemic has affected city government revenues and the bottom lines of Springfield’s two large acute-care hospitals. It has closed restaurants and increased demand for mental-health services.
Here are some examples of COVID-19’s reach.
Tourism
Some of the tourism-related jobs may have returned since January, but the majority haven’t, Dahl said.
He would like to see Gov. JB Pritzker alter his Restore Illinois plan to allow for gatherings of more than 50 people before the economy is allowed to fully open in Phase 5 of the current plan. That way, he said, some conventions could resume.
Restore Illinois does not contain an intermediate step between the 50-person limit in Phase 4 and unlimited meeting attendance in Phase 5.
“We really need to find some common ground,” Dahl said.
It’s particularly difficult in Illinois because surrounding states have less-restrictive guidelines that are more attractive and amenable to groups wanting to hold conventions and large meetings, Dahl said.
As it stands, the spring convention season in Springfield could be a bust, Dahl said. Event planners are hoping fall conventions will be more doable, he said.
Tourism-related spending and revenues in Springfield, estimated at $482 million in 2019, probably dropped by 50% or more in 2020, he said.
The drop in hotel occupancy meant the community lost 300,000 paid hotel room nights in 2020, and there were 1 million fewer visitors, Dahl said. “It really affects the entire town,” he said.
As for the future of the industry locally, Dahl said: “I’m cautiously optimistic. We have to get the nation vaccinated.”
More:More infectious COVID-19 variant identified in Chicago
City and state finances
The city of Springfield experienced about a $4 million drop in sales tax revenues in the fiscal year that ended in February because of the COVID-19 pandemic, but the loss originally was projected to be several times larger, city budget director Bill McCarty said.
Sales tax revenues for the city were better than expected, and there may be several reasons for that, he said. Residents may have focused their discretionary spending on Springfield businesses rather than vacations and spent more on home repair while cooped up to reduce the spread of COVID-19, he said.
The impact of an increase in unemployment and reduced spending at small businesses in 2020 may have been offset somewhat by unemployment compensation, stimulus checks and federal Payroll Protection Program grants and loans, McCarty said.
The city stopped charging for downtown parking to spur consumer spending, but the overall reduction in revenues from a variety of sources didn’t lead to any layoffs of city employees during 2020.
To offset revenue declines, city finances received a boost from a $4.8 million grant from the federal coronavirus relief program, McCarty said. The city also drew upon reserves and slowed down internal spending at the beginning of the pandemic, he said.
City government’s tight finances may have hastened budget discussions regarding potential cuts at the Springfield Fire Department and related concerns about growing police and fire department pension costs, McCarty said.
He said he is optimistic that city revenues will rebound in the new fiscal year as COVID-19 vaccinations expand. “I think we will primarily be out of this thing by summer,” he said.
At the state level, Gov. JB Pritzker has said COVID-19 is responsible for more than $4 billion in revenue losses during the previous fiscal year and the current fiscal year, which began July 1. To help cope with those losses, Pritzker is trying to make about $700 million in spending cuts during fiscal 2021.
The governor has proposed eliminating more than $900 million in corporate tax breaks in the next fiscal year as part of a fiscal 2022 state budget proposal with essentially flat spending and a second-year without a recommended $350 million boost in the school aid formula.
Hospital finances
Memorial Health System, a $1.3 billion-a-year enterprise and one of the region’s largest employers, posted an operating loss of 1%, or $13.9 million, in the fiscal year ending Sept. 30. Memorial ended the fiscal year $33.5 million in the black, with a 2.4% positive margin when including investment income.
The system, which operates 500-bed Memorial Medical Center in Springfield and hospitals in Decatur, Jacksonville, Taylorville and Lincoln, faced potentially dire financial straits after canceling elective procedures for six weeks in spring 2020 to prevent the spread of COVID-19 and conserve on personal-protective equipment.
The not-for-profit system lost $87 million in March 2020 alone but took action to reduce internal expenses the rest of the year, according to Edgar Curtis, the system’s chief executive officer. Those measures included using attrition and about 140 layoffs to reduce full-time equivalent employment of the system by 10%, or 788 positions, to today’s total of 6,834, he said.
“We’ve had to really cut back because of the change in everything,” Curtis said.
The system benefited from $66 million in federal COVID-19 relief funding, as well as $145 million in advanced payments through the federal Medicare program to stabilize cash flow, Curtis said.
Emergency departments in the system’s hospitals are seeing 20% fewer patients, and the hospitals are seeing 10% fewer inpatients overall. Those reductions, being felt by hospitals nationwide, reflect persistent skittishness in the population even though Curtis said Memorial has taken aggressive measures to reduce the risk of COVID-19 transmission.
Finances are on the rebound, though the system’s recovery and the health of people in communities served by Memorial will depend on an expansion in the availability of COVID-19 vaccines, he said.
HSHS St. John’s Hospital and the rest of Hospital Sisters Health System, which operates in Illinois and Wisconsin, saw “a significant financial impact as a result of COVID-19 and a reduction in volumes along with the cancellation of elective procedures, particularly at the beginning of the pandemic,” spokeswoman Erica Johnson said.
The vast majority of the financial losses occurred from April through June — the final quarter of HSHS’ fiscal year — with “continuing revenue losses and cost increases from July through the fall,” she said. “We continue to experience additional COVID-related operating losses.”
The Catholic system’s annual report and audited financial statements listed an “operating margin loss” of $177.5 million, or 7%, during the last fiscal year. The report said the system, with $2.3 billion in revenues annually, received $142 million in federal COVID-19 relief funds and $248 million in advanced payments through the Medicare program.
Ten percent of the system’s workforce was laid off “to provide for a strong, stable future for HSHS through and after this unpredictable pandemic,” the annual report said. The system did not list the number of jobs eliminated, but the system’s website said that in 2019, there were more than 15,000 employees, including 3,224 doctors. A 10% reduction from that number would be about 1,500 positions.
Also:Extended federal benefits end for some jobless residents
Telemedicine visits
SIU Medicine, the multi-specialty private practice group of doctors at Southern Illinois University School of Medicine, switched most of its regular office visits to a virtual platform last year to reduce risks of COVID-19 infection, but the practice’s normal volume of face-to-face visits has returned, according to chief medical officer Dr. Harald Lausen.
SIU still offers the virtual option for office visits and has found it especially popular among psychiatric patients, he said. When the pandemic began, public and private health insurance companies began to reimburse for virtual medical office visits at the same rates as in-person visits, and that practice continues, Lausen said.
Mental health and substance abuse
Memorial Behavioral Health, which provides mental health counseling and operates a free emotional-support hotline at (217) 588-5509, is experiencing an increase in demand for services related to heightened stress during the pandemic.
“Everyone in our area is seeing increased volumes,” said Diana Knaebe, president of the Memorial Health System subsidiary.
People who do not become ill from COVID-19 but experience unemployment, isolation and mental illness during the pandemic are considered additional “casualties of COVID,” said Marvin Lindsey, executive director of the Community Behavioral Healthcare Association of Illinois.
“This is all over the state and in varying degrees,” he said.
Lindsey pointed to a report from the Kaiser Family Foundation in February that said the share of U.S. adults reporting symptoms of anxiety or depressive disorders increased from one in 10 to four in 10 during the pandemic. And a June survey said 13% of adults reported new or increased substance use because of COVID-19-related stress.
The pandemic will have a long-term effect on mental health, especially in Black and Hispanic communities where the stigma surrounding mental illness is more pronounced and people are hesitant to seek help, Lindsey said.
“It’s going to be years of people coming to grips with what’s going on with them,” he said.
Ron Vlasaty, chief operating officer of Family Guidance Centers, which operates substance-use disorder treatment facilities in Springfield and elsewhere in Illinois, said the not-for-profit organization has seen evidence of increased alcohol-use disorder and opioid abuse related to isolation, depression and anxiety.
He added, though, that said the availability of telehealth services has made it easier to serve clients during the pandemic.
Child abuse
The Illinois Department of Children and Family Services declined to speculate on whether increased stress in homes during the pandemic and fewer children in school are leading to more child abuse and neglect and fewer opportunities to intervene.
Reports of suspected child abuse and neglect have dropped during the pandemic — from 18,000 reports in July 2019 to about 15,000 reports in July 2020, DCFS spokesman Bill McCaffrey said.
But the number of investigations by the department into those months’ reports were similar, with 6,620 investigations in 2019 and 6,588 investigations in 2020, he said.
Contact Dean Olsen: [email protected]; (217) 836-1068; twitter.com/DeanOlsenSJR.
