LAKE IN THE HILLS – Lake in the Hills trustees are considering two new taxes to fill a $1 million deficit for the village’s fiscal 2018 budget.
The village is proposing reimposing a natural gas use tax through Nicor and an electricity tax through Commonwealth Edison. It is projected to cost $3.75 for gas and $4.56 for electricity a month a home.
Both taxes are estimated to annually generate $1.2 million combined, Finance Director Shane Johnson said.
Trustees discussed the proposal at a Committee of the Whole meeting Tuesday night and will vote at Thursday’s Village Board meeting.
“Uncertainty and financial pressure from the state of Illinois, rising pension costs and overdue capital expenditures are creating a challenging environment. In my opinion, I don’t see this going away anytime soon,” Johnson said.
If no action is taken, this will be the fifth deficit budget the village has had in the past six years, with 2014 being the only year it had a surplus of $123,180.
Johnson said a deficit is nothing new for the village, and the number continues to rise each year as the cost of services increase.
The utility tax funds will be used for capital improvement projects, which pays for projects and equipment needs. The fiscal 2018 draft budget calls for $1.7 million for these capital projects:
• Playground replacements, basketball, tennis court and skate park resurfacing and engineering for the first phase of the Lakewood Road bike path
• Four police patrol car replacements and two half-ton dump trucks with plows for Public Works for snow removal
• Village property replacements of parking lots, carpet, roofing, siding and gutters
• Technology hardware and software investments
The village previously has had the taxes, but they were repealed in the early 2000s. Currently, Algonquin, Carpentersville, South Elgin, Streamwood, Lake Zurich, Round Lake Beach and other villages have both taxes, according to village documents.
Johnson projects that $5.5 million will be needed over the next five years to keep up with capital projects.
No revenue source is set for these capital projects and the money has come out of the general fund in the past. In fiscal 2018, $1.7 million would be needed from the general fund if no tax is passed and $500,000 is needed from the general fund with both taxes implemented.
Schools and local government buildings will be exempt from the taxes.
Trustee Stephen Harlfinger said he remembers when the taxes ended in 2004 and the village was thriving, and while it survived the 2009 recession, several capital projects have been pushed back.
“I don’t think anyone is pro-tax, but I support this because it’s what we need,” Harlfinger said.
Village President Russ Ruzanski said he supported the taxes because the lack of revenue for capital projects has left the village’s general fund short.
“We are reinstalling something that was ended when things were prosperous, and we had money to spare,” Ruzanski said. “These projects are big-ticket items, like our police cars and snowplows, and we’ve pushed off projects from time to time, but it has to stop at some point so we can provide the services residents expect.”
Savings already in action
For the eighth consecutive year, the village is not increasing property taxes.
The village is estimating a $210,000 reduction of expenses by cutting four full-time staff positions: the assistant village administrator, building inspector, a secretary in the community development department and an employee from the water fund. The cuts include salary, pension, taxes, insurance and other benefits, according to village documents.
The village also will save $65,000 by having a lower cost and higher deductible through the Intergovernmental Risk Management Agency in 2011, which provides workers’ compensation and general liability coverage.
Also, the water main replacement program was completed, which residents have been paying $16 a home for, Johnson said. Resident savings are projected at $264,000 or $27.85 a home because of the program’s completion and no increase in water rates.
The fiscal 2018 budget will be presented at the Nov. 14 meeting.