Schaumburg budget based on current state funding
Though Schaumburg's proposed new budget ambitiously combines enhancements of service with 1 percent reductions in spending and the property tax levy, it relies on one big assumption - the current system of state funding for municipalities.
Village Manager Brian Townsend reminded trustees on Tuesday that Gov. Bruce Rauner has proposed to that system significant changes, which are still being debated in Springfield, even as Schaumburg nears the deadline for its 2015-16 budget.
"At this time, this is probably the largest threat to our financial stability," Townsend told trustees.
Schaumburg currently receives about $41.6 million per year in state-shared revenues, including $31.4 million in state-shared sales tax and $7 million in state-shared income tax.
If changes to the current funding structure occur, Schaumburg and other municipalities would be faced with an unusual amount of midyear financial adjustments, Townsend said.
Though Schaumburg has a healthy level of emergency reserves, Townsend said he would not recommend relying on them to see the village through the better part of a year with major reductions in state funding.
When preparations for the budget that takes effect May 1 began in earnest in January, there was already talk about Rauner's plan to cut in half municipalities' share of the state income tax.
Townsend asked each of the village's departments to look for ways to reduce their budgets by 1 percent if needed. At the end of that process, $2.4 million in potential savings was identified.
But it's uncertain whether that would provide enough wiggle room for the big unknowns that lie ahead this year, Townsend said.
"We couldn't tell what the potential impact was going to be or when it might take place," he added.
But Townsend does consider the proposed budget a solid financial plan for the year ahead that can be adjusted if necessary.
The four trustees present at Tuesday's budget hearing unanimously recommended its approval.
The budget calling for a sixth consecutive reduction in the property tax levy must be approved April 28.