Story posted Wednesday, July 1, 2009
No Serious Impact
Slowdown In Payments Possible, But Village Not Too Worried About Budget Battles Downstate
By DWIGHT ESAU Journal & Topics Reporter
While state legislators may be fiddling about state finances in Springfield, Mt. Prospect is not burning.
This was the message this week from David Erb, finance director of the village. He discussed the state's financial crisis, and how it may affect the village, with the Journal & Topics Newspapers.
The discussion was precipitated by the budget battles between Republicans and Democrats in the General Assembly, and the re- cent return of lawmakers to Springfield to try and come up with a full year's budget in light of the state's estimated $11.6 billion deficit.
"We are monitoring the state activities with a little bit more intensity than usual, but not necessarily by holding our breath or panicking," Erb said. "The public is hearing a lot about possible cuts in not-for-profit services, but we don't anticipate any significant cuts or eliminations of our tax revenues that come through long-established state programs.
"If the budget fight continues for awhile, we may experience some delays in receiving our tax revenue payments, and that could affect how we administer our programs that relay on those payments," he explained. "But we don't anticipate elimination of the utility, income tax-sharing, and state use tax revenues that we have been receiving for many years. We have heard nothing about any proposal, for example, to change the formula by which state income tax allocations are determined. We would be opposed to any changes in that."
It's more like a possible slowdown of payments, rather than fears of elimination of revenues, he said.
Erb said about $9.2 million, or 21%, of the village's general fund revenues of $42 million comes from state tax or aid sources. "We are about two weeks away from beginning our planning for our 2010 budget," he went on. "We are only halfway through our 2009 year, and state aid and tax payments have slowed somewhat, but not to a degree that impacts us seriously."
The village is also in the middle of a multi-million-dollar capital improvement program that includes a new fire station, new emergency services center, and improvements to the public works facilities. "We issued bonds to pay for those projects and the debt is being repaid from dedicated revenue sources that are not affected by state budgets," Erb said.
State legislators returned to Springfield yesterday (Tuesday, June 30) to take up the budget crisis again. They approved a six-month budget earlier in the spring, but they really need to approve a budget that takes the state through a full year.
Biggest problem in the impasse is the ongoing debate about whether to raise the income tax (an increase from 3 to 4.5% has been proposed by Gov. Pat Quinn), or cut programs and services, or some combination of both.
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