No tax increase for now in Kane County
A desire to make budgets appear balanced, at least on paper, may have contributed to a $2.8 million budget hole for Kane County. For now, it doesn't appear a property tax increase will be used to fill it.
The county board's finance committee Wednesday tried to determine what's causing the midyear shortfall. Nearly all of the problem relates to income falling far below what several departments predicted heading into 2017.
Kane County Circuit Court Clerk Tom Hartwell's office has the biggest disparity between the money he told the county board he'd bring in this year and what he's producing. Hartwell explained his numbers are off because the county needed to solve a budget gap coming into the year.
"Last June I projected revenue of about $5.9 million," Hartwell said. "At that time we had a budget shortfall, so we revised our number upward in hopes there was going to be additional revenue. We submitted a budget with $6.4 million (in revenue). As it turns out, it looks like we're going to be closer to $5.4 million."
Officials from the state's attorney's and sheriff's offices and court services will be called on to explain why money from their income projections hasn't materialized in upcoming meetings.
County board Chairman Chris Lauzen pressed for action in addition to answers. The more time the board takes to solve the budget problem, the less time there is for those solutions to work, he said.
"At some point, no matter what the reasons are, actions have to take place," he said.
One action that won't play an immediate role, but may for the 2018 budget, is a property tax hike.
County officials had frozen the tax levy for five years until a thaw last year when trying to solve the budget hole coming into 2017. Even then, with an election looming, county board members did not increase the tax levy as much as they could have. It's too late for any further property tax increase to play a role in solving the 2017 budget problem.
Joe Onzick, the county's chief financial officer, explained the budget gap will extend into future years, and grow, because income is not increasing at the same pace as spending. Much of that spending involves adding new employees - 27 since 2013 - to the payroll and benefits.
Moreover, all of the county's union contracts expire at the end of the year. New agreements typically involve commitments to raises in excess of 2 percent a year. Onzick said there's no money to fund such increases.
That's a precursor to establishing the foundation for an argument that raises can come only at the expense of jobs heading into new contract negotiations. The counterargument for employees seeking raises is to push for new income.
But Onzick explained a property tax increase wouldn't bring in enough cash to address even the county's current spending.
A 1 percent payroll increase adds about $600,000 in new spending to the budget. A 1 percent increase in the property tax levy yields about $460,000.
The board can increase the levy by only up to 2.1 percent without a referendum. State law limits nonreferendum property tax increases to the cost of living growth for the previous year.
"That is not even enough to address this deficit," Onzick told the committee. "So that would not be a significant part of this solution if it were even to be a part."