Libertyville to consider reinstating utility tax if state cuts funding

Reducing the frequency of grass mowing, deferring items such as salt storage or reinstituting or increasing some utility taxes are among the possibilities Libertyville officials say they will consider in case of state cuts.

The impact of Gov. Bruce Rauner's proposed reduction in the local share of the state income tax and a proposed property tax freeze could result in a deficit in the upcoming 2015-16 budget, which begins May 1, village officials say. The village board is scheduled to discuss those and other options, such as the disposition of utility taxes, as it considers a draft of the new budget Tuesday during an informal work session. The meeting begins at 6 p.m. at village hall, 118 W. Cook Ave.

"I don't want to react after the fact," Mayor Terry Weppler said.

A reduction in the village's share of state income tax would cost the village about $1 million, and a two-year property tax freeze would cut another $600,000, the village estimates. Options to help offset the losses are being reviewed.

Because the state budget year begins July 1 and there is expected to be considerable discussion and negotiation, the potential impact on towns and other local entities is not expected to be known immediately.

"Everybody's in the same position," Weppler said.

Among the possibilities for Libertyville are: delaying the allocation of $4.2 million in surplus funds until the state budget is approved; use the surplus for short term needs until other options are determined; defer day to day expenses, such as salt storage; delay any reduction in utility taxes until July when the state budget is known; or revive a local gas tax and increase the electric tax to the maximum allowed.

Also on the list are establishing a new revenue source, such as an eating and drinking establishment tax, and cutting staff, although the number of full-time employees has dropped from 187 in 2003 to 161.

While Weppler said he didn't think there will be state legislative support for a worst-case scenario in terms of cuts, he noted Libertyville and other communities have been cutting for years.

"We've cut all the fat our of our budget," he said.

For the current budget year ending April 30, the general fund that pays for day to day operations is $4.2 million above the amount required by village policy. A portion of that amount can be used for capital improvements, pension payments, or to redeem bonds.