Are higher taxes, fees ahead for Hawthorn Woods' residents?

Hawthorn Woods officials are considering tax hikes and user fees to plug an anticipated $66,000 deficit in the village's 2009 budget proposal.

The advisory finance committee this week reviewed options to avoid a deficit. Since November, the village has grappled with revenue shortfalls caused by a slowdown in new home construction.

Among the more favorable options were raising the existing telecommunication tax, which does not need voter approval, and installing red-light cameras at intersections.

Officials anticipate doubling the 1 percent telecommunication tax would mean an additional $45,000 annually, or an extra $6 per resident. Red-light cameras would generate $100,000 to $125,000 yearly.

Another option is raising the police protection tax by 28 cents to generate another $130,000.

Committee members rejected going to a referendum to raise taxes or impose new taxes, such as a tax on electric, gas and water services.

"Those (utility taxes) are generally the most offensive to the public that you could do of all these increases," committee member Noah Seidenberg said.

Voter approval would be needed through a referendum to establish new taxes, such as funding police pensions, employee retirements, park and boulevard improvements and for forestry, which also were before the committee.

The finance committee did not vote on any options, and asked village staff to draft recommendations on which to pursue.

Mayor Keith Hunt said he would not support any new taxes or fees in this economic climate.

"You don't raise taxes during a recession," he said. "It's not going to happen. We're going to have to tighten our belts."

Hunt said the village should consider other revenue sources, such as generating new sales taxes and fostering economic development.

Hawthorn Woods cut expenses significantly since last November when officials discovered a $750,000 revenue shortfall blamed on a housing market slump.

Despite slashing expenses and laying off eight employees, the deficit remained at $750,000 in March and forced the lay off of six more employees.

That belt-tightening will help the village end this year on Dec. 31 with a $65,000 surplus, Village Administrator Jim Bassett told the committee.

"We pretty much feel like we've cut about as much as we can cut as far as operations," Bassett said.

Next year's projected deficit is due to an increased cost for road salt, higher police pension fund contributions, and hiring a police officer. The village anticipates less revenue from state income taxes and fines generated by traffic tickets since six police officers were lost through layoffs and resignations.