Elk Grove approves tax levy increase

The Elk Grove Village board Tuesday night approved the 2009 property tax levy with an increase of nearly 5 percent from the year before.

The jump largely stems from an increase in the state-mandated police and fire pension fund contributions.

The village's general fund portion of the levy, amounting to roughly $8.7 million, actually represents a $9,600 decrease from last year, officials said.

The overall tax levy, through which the village would collect roughly $17.9 million for the 2010-2011 fiscal year beginning May 1, includes an 11 percent increase for police and fire pension fund contributions and a roughly 9 percent increase to fund the library.

Mayor Craig Johnson said the village has no control over setting the levy for police and fire pension fund contributions that appears as a separate line item on a homeowner's property tax bill.

"The legislature tells us what we have to levy," Johnson said. "The general fund area, which we have control over, we have cut."

For the third year in a row, the village has not increased its portion of the property tax levy used for operations.

Elk Grove Village still boasts the lowest combined property tax rate in Cook County - 5.585. But with sales tax revenues dipping by nearly $500,000 monthly, the village is down $6 million a year, on top of declining property tax revenues.

For now, Johnson said the village will continue using reserves, as it has been for the past two years, to make up for revenue shortfalls.

The fund balance that was at $19 million at the beginning of the current fiscal year is expected to drop to between $14 million and $15 million by April 2010. Officials expect to borrow $3 million from reserves for 2010-2011 operating expenses.

"We caution people that we cannot draw on these reserves forever," Johnson said. "We want to do it as long as we can."

The village would need to maintain a fund balance of between $11 million and $12 million, if officials hope to have at least four months worth of operating expenses on hand. The fund is expected to be at that level by April 2011.