Libertyville looking at more budget hits

Just when they thought it couldn't get worse, Libertyville leaders have learned that even less money than expected is coming in.

Several actions, including furlough days for nonunion employees, will be needed to close a revenue gap for the current budget year, officials said Wednesday.

And barring an unforeseen spike in sales tax - or further cost cuts - 2010-2011 looks even worse, despite recent increases in utility taxes expected to bring in $2.5 million.

"We would not be able to operate the full fiscal year. We would run out of money," said Finance Director Pat Wesolowski.

The 2009-10 budget was balanced when it began May 1. A month ago, Wesolowski estimated that had become $544,000 deficit in the general fund, which pays for day-to-day operations. The revised estimate is now nearly $952,000.

To offset that, the village could require about 90 full-time employees to take one furlough day a month beginning Nov. 20; allocate $300,000 in vehicle sticker money to the general fund, which would cut money for capital projects next year; and forego vehicle replacement beginning in February.

Possibilities for 2010-11 include pay freezes; going to a 32-hour workweek; decreasing health and dental care contributions; eliminating all employee training; closing or reducing hours at the Riverside golf course and pool; and canceling the annual fireworks show, unless a sponsor can be found to pay for it.

The crisis was obvious Tuesday, as the village board continued discussion of the budget situation. No official action was taken.

"An improved economy isn't going to get us back to normal," said Trustee Rich Moras, who chairs the board's finance committee. The group has been meeting every month of late, rather than once every three months.

"We have significant structural changes to address," Moras added.

State income tax is down because of higher unemployment. Sales continue to slide. Expected revenue from red light cameras has not materialized because they haven't been installed. Revenue from building permits will drop. Debt payments for the Libertyville Sports Complex have been sapping reserves. And on it has gone.

"This last year has been so difficult to project," Wesolowski said. "At some point, I would hope sales tax will rebound. Will it rebound where it needs to be? I doubt it."

Sales tax growth for 2010-11 is estimated at zero and only 1 percent in subsequent years.

In 2001, the village received $8 million in sales tax, nearly three quarters of that from auto sales. By 2008, total sales tax had dipped to about $6.2 million with auto sales down 37 percent. In 2009, the village is on pace to collect $5.2 million.

State figures weren't available Wednesday but Wesolowski said she learned that August sales tax, despite the Cash for Clunkers auto program, did not meet expectations. Because of glitch in reporting times, the village hopes sales increases from that source will surface next month.

But the prognosis is bleak even if the economy improves.

"We don't have the luxury of making assumptions that the future will make these problems go away," Moras said.