Story posted Friday, November 20, 2009
Trustees Ask For Lower Tax Levy
By RICHARD MAYER Assistant Managing Editor
In an effort to save taxpayers some money, Mt. Prospect village trustees directed Finance Director Dave Erb to come back on Tuesday, Dec. 1 with a 5% tax levy increase instead of the original proposed increase of 9.89%.
This means an average taxpayer with a home market value of $350,000 would be assessed an additional $35 on their tax bill to the village instead of approximately $70.
The proposed 2009 property tax levy, the amount of revenue an individual taxing body requests to collect from property taxpayers to fund operations for the year, was expected to increase 9.89% as a result of the dramatic increase to required police and fire pension contributions.
Residents with a home market value of $350,000 paid $695 in property tax money this year. Next year, instead of paying $764, they will pay approximately $730.
The board came to a consensus during Tuesday night's regular village board meeting to lower the increased property tax percentage and dip into the village's reserves to help offset the now less revenue.
Erb said there were three options---raise taxes, cut programs, or dip into the village's reserves.
Trustee Arlene Juracek suggested the board come up with a way to do a little of all three scenarios.
"We can't save our way into prosperity just by cutting costs," said Juracek.
Juracek went on to say the next few years will not be easy financially and the board and staff need to come up with new innovative ideas to reduce costs.
"We really have two choices---make additional cuts or look at our reserves to reduce the burden of our taxpayers," said Trustee Michael Zadel.
"Driving down reserves is a good middle of the road," said Village Manager Michael Janonis. "There already has been cutting in 2010 and there are no fee increases and no additional taxes except for a water rate increase."
According to Erb, with the tax levy only being an increase of 5% from 2008, the village will need to take approximately $416,000 out of its reserves to balance the 2010 budget, leaving approximately $9.5 million remaining instead of $9.9 million in reserves if the tax levy stayed constant at 9.89%.
The village was looking at a $300,000 deficit for 2010, but Erb said that should be eliminated by next month through various employee groups such as police, fire and public works unions and non-union employees. With the levy decreasing, that new money ($416,000) needs to be replaced through the village's reserves to balance the 2010 budget.
With reserves decreasing to $9.5 million after the $416,000 is borrowed, the General Fund will also decrease to 21.1% completely funded. At the beginning of 2009, the General Fund was 30% funded.
According to Trustee Paul Hoefert, there are positive economic signs starting to show on a national level, but he emphasized the village cannot dip into its reserves on a regular basis and the village must continue to be managed on a conservative basis.
"The taxpayers create growth in the economy," said Trustee Steven Polit. "We need to use our reserves for extraordinary circumstances and with a 5% increase resulting in about $3 more a month for taxpayers is responsible."
Janonis said beginning Jan. 1, 2010, village staff will monitor revenue trends and within two months, they might be able to determine if the village needs to take additional action regarding personnel layoffs or furloughs.
A public hearing regarding the 2009 tax levy will be conducted Tuesday, Dec. 1 at village hall at 7 p.m.
In related news, Erb presented a third amendment to the current 2009 budget, resulting in village staff cutting an additional $446,695.
To date, village departments have reduced spending in the General Fund by $1.5 million.
According to Erb, a remaining $400,000 to balance the 2009 budget will come out of reserve monies.
"This has been a very unique year, because we have dealt with declining revenues throughout the entire year," said Erb.
Some recent cuts included a reduction in tree and stump removal ($31,000), not installing holiday wreaths, eliminating the Winter Parade ($25,425), and more.
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