Traffic map
Article updated: 11/5/2013 6:20 PM

Palatine budget holds steady — for now

  • Article
text size: AAA

Palatine's proposed 2014 budget includes a small decrease in property taxes for the third year in a row along with no new fees, officials said, as expected increases in the village's share of the state income tax and other revenue will provide for a 2.8 percent increase in spending.

The proposed budget of almost $108.8 million, including $66.1 million for operations, represents a hike of almost $3 million.

Advertisement

Meanwhile, the property tax levy of $21.8 million represents a decrease of $86,000.

The village board will hold a public hearing on the budget at 7 p.m., Monday, Nov. 18, with final adoption scheduled for Monday, Dec. 2.

"I think this is a very good budget," said Village Manager Reid T. Ottesen. "Our finances are solid, and we are providing the core services residents want while property taxes are dropping for the third year in a row."

Still even as the village's economic development continues to grow and no services will be cut this year, Ottesen predicts trouble ahead due to pension obligations and the state's fiscal crisis.

In fact, even if investments continue to return 7-10 percent a year, in four or five years pension costs will be so great that providing essential services will require raising taxes, he said.

Palatine's pension costs will increase about 2 percent to $7.5 million for 2014, lower than they might have because of good market returns, he said. Still, it will be decades before the village sees a difference in costs from the less-generous new Tier 2 pension system for new hires.

"With no legal way to increase the employee contributions, reduce benefits, or defer payments, the village is left with the daunting task of funding these programs," Ottesen said in his budget report. He specifically mentioned the 3 percent annual increase in retirees' payments.

Besides the looming municipal pension costs that "no one in Springfield is even talking about since they can't resolve their own pension crisis," Ottesen has other worries at the state level.

The state income tax increase to 5 percent is supposed to fall back at the end of 2014, and legislators talk about taking money away from the municipalities' share.

Next year, however, income taxes will be Palatine's most significant increase in revenue when they rise by $1 million to $6.5 million.

Ottesen is asking the village board to consider increasing some fees starting in 2016 to cover costs of capital improvements, which include street repairs and replacing expensive vehicles for the fire, police and public works departments.

"A 10-year projection for capital improvement and equipment indicates an average annual investment of $1.975 million," the report said. But estimated funding, which has been based on the telecommunications tax that declines as people abandon landlines for cellphones, will hit a shortfall of $300,000 annually.

To make this up Ottesen recommends the council raise vehicle sticker prices, refuse fees or the electric utility tax. Whichever source the council selects would cost a typical Palatine residence $20 a year, said Ottesen.

The number of full-time village employees will have fallen by 28 to 339 between 2009 and Jan. 1, 2014. Changing two full-time positions to part time as employees leave accounts for this year's reduction of two positions.

Layoffs occurred in previous years.

Salary increases in 2014 will be 1 to 2½ percent for most employees, with police and firefighter salaries to be determined through negotiations.

Comments ()
We are now using Facebook comments to offer a more inclusive, social and constructive discussion. Guidelines: Keep it civil and on topic; no profanity, vulgarity, slurs or personal attacks. People who harass others or joke about tragedies will be blocked. If a comment violates these standards or our terms of service, click the X in the upper right corner of the comment box. To find our more, read our FAQ.

This article filed under

Latest Video

MostViewed

Today
Yesterday
Most Commented
Top Jobs

    View all Top Jobs Place a job ad

    MarketsReport

    DHExtras

       
    • Newspaper next section - Newspaper next section Report card checker - report card checker
    • Dh innovation award 2 - Dh innovation award 2 Zillow /real estate page
    • Discuss refer On Guard series
    • Newspaper archives -- Monday or anyday Mike North

    FacebookActivity

    BusinessDirectory

    Connect with a business or service in your area fast. First select a town, then enter a search term or choose one of the listed popular searches:

    Don't see your town listed? Visit our full directory to begin your search.