Mt. Prospect eyes trouble ahead for municipal budget
Mount Prospect Mayor Arlene Juracek said the village needs to plan for a potential $3 million shortfall in the 2016 budget, given the uncertainty of state money in the near future.
Mount Prospect's current financial picture is relatively strong, Finance Director Dave Erb said this week. The village's 2014 income was $113.9 million, higher than the $113.1 million expected, while income earned on pension investments was more than anticipated, he said.
As well, the $9.4 million Isabella flood project was deferred and the general operating fund ended the year with a $967,040 surplus, which Erb attributed to revenue growth and belt-tightening within village departments. In addition, the fund balance was at $12.8 million by the end of 2014.
But that solid financial picture could change quickly if Mount Prospect loses its local government distributive funds, Juracek said - like a share of the state income tax, which Gov. Bruce Rauner has proposed to keep to help the state make up shortfalls.
"We need to model some pretty severe restrictions on our ability to levy and come up with a list of things we need to change or not do," in order to hit a lower levy target, she said.
Tuesday night, Erb presented a proposed 2015 property tax levy of $18.4 million, an increase of $745,000 or 4.21 percent over 2014. The 2015 levy is collected in 2016.
He also outlined lower levy scenarios that include both a 2.5 percent and no increase.
The latter, Erb said, "assumes possibly that the state decides to freeze the property tax levy" for Illinois communities. Those scenarios would result in deficits of $227,000 and $664,000, respectively, for 2016.
"We have managed deficits like this in the past," Erb said, adding the village has reduced funding for vehicle replacement programs and similar expenditures.
Juracek said a zero percent increase to the levy seems attractive, but she'd prefer not to start there.
Trustee Steven Polit agreed, saying they need to be wary of other aspects of Rauner's Turnaround plan, like freezing municipal levies for two years.
"We have to be extremely judicious that we don't get ourselves in a levy of 2.5 or zero percent and then have a freeze come along for two years and be locked into those numbers for three years," Polit said. "You always have to worry about what's happening right behind what's happening."
Finance Commission member John Kellerhals said their target should be in the zero percent to 1 percent range from the standpoint of developing the budget, while 3.5-5 percent should be the ceiling.
"The 3.5 to 5 percent, from the time that I have been in the village, seems modest, seems reasonable, until you compound it," Kellerhals said. "And then it becomes unreasonable."
He said he is concerned that "people will make a choice to leave the village," rather than pay the increases.