Hanover Park may tap into reserves to fill budget hole

Like its neighbors, Hanover Park is determining how to best balance its budget in the wake of a recession and a possible decline in state aid.

At least one official thinks tapping into reserve funds is the way to go.

The board learned Thursday that in a best-case scenario, meaning Springfield maintains its current funding, there's still a hole of about $600,000. But Village Manager Ron Moser warned the deficit will grow should legislators approve Gov. Pat Quinn's proposal to reduce municipalities' share of state income tax revenue by 30 percent - or about $950,000 to Hanover Park.

Adding to the burden is the state's tardiness in sending those checks; Moser said the village just received payment for November. And a representative with the comptroller's office made clear this week that when it comes to priorities, municipalities rank behind debt service, school aid, state payroll and reimbursing Medicaid vendors.

"The comptroller said he's running out of catastrophic adjectives to use to describe the state's situation," Moser said.

As it stands, the preliminary fiscal year 2011 general fund budget is $24.2 million, or a 1.1 percent decrease from this year. It has to be approved by May 1.

To offset the deficit, Finance Director Lafayette Linear proposes tapping into reserves. Some trustees seemed to soften their opposition to the idea when they learned the past four budgets appropriated savings to the general fund. Only in 2008 did the village actually spend any of the money.

Linear also reminded officials that the reserve fund would still be 32.4 percent of the operating fund - well above the board's guideline of 25 percent.

Moser said he will personally approve all capital expenditures, and only when the state's checks are received. He also said that should the funding from Springfield decline, he'll ask department heads to prepare layoff recommendations in they event they become necessary.

Trustee Bill Cannon is especially wary of balancing a budget with reserves, saying only government can get away with it.

"You would not manage your personal finances this way," he said.