A return to vehicle stickers and a referendum to keep the village’s tax rate the same after Lake Michigan water bonds expire next year are just some of the measures Burr Ridge is considering in the wake of an expected massive cut in state funding.
Gov. Bruce Rauner’s proposal to cut 50 percent of the state’s local government distributive funds would mean Burr Ridge would receive $522,670 less in revenue from the state. The village is taking steps, such as putting off major equipment purchases, in anticipation of that cut becoming reality.
Village Administrator Steve Stricker said no one in Springfield knows what will happen with the local government funds, originally enacted so municipalities would not institute their own income tax. The budget stalemate has put the money in jeopardy, Sticker said.
“My concern is the longer this (budget battle) goes, the harder it is going to be to come up with the funds for this additional revenue,” Stricker said.
He said in some cases, such as with the village’s road program, expected distributive fund money has already been spent. If Rauner’s proposed 50 percent reduction occurs, the village will have to make that money up through other means.
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The state is also more than $200,000 behind in providing expected motor fuel tax revenue to the village, Stricker said. He said he has yet to be assured that those funds will eventually be allocated to Burr Ridge. The village may need to address that $224,500 motor fuel tax money shortfall.
One way to compensate for the drops in state funding, Stricker said, would be to bring back village vehicle stickers. Once again requiring stickers for residents’ vehicles is estimated to generate between $350,000 and $500,000 annually.
“There are 10,000 vehicles registered in the village,” Stricker said. “That is a revenue source, if the Village Board determined they wanted to go back to vehicle stickers.”
Stricker said the village dropped stickers several years ago, with officials opting to recoup that money through telecommunication taxes instead. However, with changes in phone services and telecommunications, that tax is not generating the money the village expected.
Jerry Sapp, village finance director, noted that the telecommunications tax generated $720,250 for the village in fiscal year 2014-15, that was $76,510 less than was projected in the village budget. It was the most underachieving fund in village revenue projections for the last fiscal year.
Sapp said utility taxes — electric, gas and telecommunications — were $40,000 under village estimates for the first quarter of 2015-16, but only a little more than $1,000 of that shortfall is in telecommunication
tax projections. A cool August didn’t require air conditioners and electricity tax revenue was more than $25,000 under projections for the first quarter of this fiscal year, Sapp said.
Stricker has talked about frequently about the village holding a November 2016 referendum that would ask for residents’ approval to extend the tax amount they pay for the Lake Michigan water main project when those bonds expire. Stricker said that $520,000 could be used to help finance the village’s annual road program and other projects without raising the current property tax.
“We could use that to give capital projects like roads and sidewalks a shot in the arm; and taxpayers would stay be paying the same amount,” Stricker said.
Stricker noted that as a nonhome-rule community the village still has room to increase its sales tax an additional one-quarter of 1 percent. That would generate an estimated $300,000 to $325,000, but Stricker felt that would be an avenue that no village leaders would want to pursue.
The village administrator said with the uncertainty of state funding, village staff has already taken steps to reduce spending. He noted major expenses, such as an aerial lift van at $135,000 and a 3-ton truck at $155,000 for the Public Works Department, have been put off until the next fiscal year. The village has also refrained from transferring $154,730 from the general fund to the equipment replacement fund to help cover those purchases.
The village has also put on hold the hiring of a police officer, which, with benefits, would cost the village $109,915. That position, the Drug Abuse Resistance Education officer, is being covered on an overtime basis by a community policing officer, according to Police Chief John Madden.
Kevin Beese is a freelance reporter for Pioneer Press.