Libertyville cuts natural gas tax in light of improving finances
Libertyville’s tax on natural gas will be reduced, while two other utility fees that were increased or instituted during the depths of a budget crunch will remain the same.
That the village board agreed to cut the natural gas utility tax from 4 percent to 2 percent is an indicator finances have improved for the 2012-13 budget year beginning May 1.
“Things are better,” Finance Director Pat Wesolowski said. “Sales taxes have rebounded somewhat, although they’re not at the levels of 2001 and 2002.”
Years of sales tax declines and other factors prompted village officials in the fall of 2009 to enact utility taxes on gas and electric and increase the telecommunication tax. The moves, which originally included sunset clauses, raised an additional $2.5 million a year and were accompanied by other actions, such as staffing reductions and furlough days for employees.
“I think it’s time we start rolling some of it back to our taxpayers,” said Trustee Rich Moras, who chairs the village board’s finance committee. “This was our safety valve. This was the lever we could pull in case of an emergency.”
Moras said that without those utility taxes, the village had been in danger of becoming insolvent.
But with a few years of budget cuts in place and an improving revenue picture, the board in December cut 1 percent from the 5 percent natural gas tax and last week trimmed another 2 percent. Each percentage point amounts to about $100,000 in revenue.
“Cautious optimism is the phrase,” Moras said. “There was no light at the end of the tunnel which precipitated us enacting those taxes.”
The board remains sensitive to potential challenges, such as a possible drop in state payments, and has opted to extend the taxes on electricity and telecommunications to May 1, 2013.
Projections show a surplus in the general fund covering day-to-day expenses will increase from $1.3 million to nearly $2.6 million by April 30. That there is a surplus is due to the utility taxes and staff reductions the past few years, according to the village.
The proposed 2012-13 budget is balanced, with expenditures estimated at $43.6 million, an increase of 2 percent over last year.
Revenues are expected to be up nearly 4 percent and include a modest bump in sales taxes and the annual 3 percent increase in water and sewer rates.
One continuing demand on village finances is the Libertyville Sports Complex. It is expected to generate a surplus of about $567,000 in 2012-13 but that’s well short of the $1 million annual debt payment.
The village refinanced to get to that level but the payments will increase in 2014-15 to about $1.8 million. The village has been trying to sell the Family Entertainment and Golf Learning Center portions of the facility at Peterson Road and Route 45 but have had no takers.
A public hearing on the budget is scheduled for April 10.