East Dundee's budget in the black

Early indicators show East Dundee is not headed for the same critical financial situation currently plaguing surrounding towns.

While municipalities like nearby Carpentersville - which is working to fill a $1 million budget gap - East Dundee staff members on Monday presented a proposed 2010-2011 budget that is more than $120,000 in the black.

"It could be a lot worse, based on the state of the economy and the direction it continues to go," Trustee Jeff Lynam said. "It could be a lot of worse."

Although the village's major revenue areas are down, projections show the village's general revenues in 2010-11 at $3,530,473, while expenditures are estimated at $3,408,842 - an almost 6 percent reduction over the current year's budget.

The village's sales tax revenue has dropped about 25 percent in the past two years, and is expected to drop from about $1.4 million collected in the current fiscal year to about $1 million next year.

Income tax revenue, which the village collects from the state, has dipped about 18 percent.

Village Finance Manager Nick Cinquegrani said the village had factored in receiving less state income tax revenues than the $269,244 it received last year.

The village anticipated a 3 percent reduction in income tax, Cinquegrani said, which should compensate for a proposal to reduce the municipal share of state income tax revenue from 10 percent to 7 percent.

Village Manager Frank Koehler said the proposed cut could reduce the village's share by almost $70,000.

"We have skin in the game, without the state making it more difficult than it already is," Koehler said, referring to the declines in property tax, state income tax and sales tax revenues.

To counteract the declines, the village implemented wage freezes for all employees, reduced the building inspector position to part-time and left two full-time positions vacant in the police department.

In neighboring West Dundee, trustees tabled a budget discussion Monday because of a plan to reduce the municipal share, Village Manager Joe Cavallaro said.

If approved, Cavallaro said the cut would leave a $180,000 hole in the village's budget.

"In good conscience, I can't present the budget knowing how dire the state's financial situation is," Cavallaro said. "I am confident there's going to be some kind of reduction."

Cavallaro said the village will work to prepare an alternate plan for next week's meeting.