Phone tax hike in Gurnee's tentative budget

Projections of declining sales-tax revenue and a recommended tax increase on residents' telephones are part of Gurnee's tentative budget for 2010-11 that starts in May.

Mayor Kristina Kovarik and village trustees were given an overview of the $47 million preliminary budget Monday evening. Village board members will be asked to approve a final budget at a meeting April 5.

Village sales tax receipts are projected at $14.9 million for the coming fiscal year - the lowest level since the 2000-01 budget. As the village's main income source, sales tax revenue has dipped by nearly $2 million over the past two years.

Kovarik said Gurnee can't depend on consumer spending alone to return and bolster the bottom line. The village doesn't levy a property tax on residents or businesses, but has a local tariff on sales.

"Even with the constriction in the commercial retail sector, Gurnee remains well positioned to capture a large portion of whatever disposable income consumers do spend," she said.

Red-light cameras at four intersections are expected to rake in at least $1.17 million in the next year. Provided the $100 fines are paid, the village would be left with $720,000 after $456,000 in payments to operator Redflex Traffic Systems Inc.

Meanwhile, residents with wireless and landline telephone bills would be asked to pay a higher telecommunications tax under the proposed budget.

Boosting the tax from 1 percent to 6 percent on the gross phone bills is projected to bring an extra $650,000 to help fill a $1.1 million general fund deficit. The village also can tap into a $20 million reserve fund to place toward the shortage, officials said.

Village Administrator James Hayner said a 6 percent telecommunications tax is not unusual in the suburbs.

"We're one of the few communities in Lake County that aren't at 6 percent right now," Hayner said. "You can count them on one hand."

Gurnee can continue providing a high level of service to residents by gaining extra cash from the increased the phone tax, according to the budget.

An undesirable alternative to the telephone tax increase would be to cut 17 full-time jobs, not contribute $16,000 for fireworks at the privately operated Gurnee Days festival and end the village's newsletter, officials state in the budget.

Gurnee's official Fourth of July celebration will not return. Kovarik created "A Gurnee Fourth: It's Red, White and You," which ran from 2002 to 2008 with pyrotechnics and entertainment.

Resident Kevin Moss offered a suggestion on how to save cash not included in the village budget. He said Gurnee could eliminate more than $100,000 in annual salary by combining the police and fire chief jobs into a public safety director post.

Glencoe is one suburb with a public safety director, where Michael Volling leads police, fire and emergency medical services.