Libertyville considers extending utility tax
A trio of village-imposed taxes on Libertyville residents could continue much longer than anticipated.
The village board on Tuesday will consider extending for 16 months the so-called sunset clause on local charges for natural gas, electric and telecom bills.
Staff recommended the move and the village board's finance committee supports it. The full board will decide at the regular meeting beginning at 8 p.m. at village hall, 118 W. Cook Ave.
Enacted in September 2009, the local tax on utility bills was regarded as necessary to make up revenue shortfalls during a budget crisis.
While some measures have eased the situation somewhat, the overall balance sheet still isn't good enough to let the utility taxes expire on Dec. 31 as originally intended.
"Our revenues have not rebounded to the extent that we need," said Finance Director Pat Wesolowski.
About $2.9 million from the three sources has been budgeted by the village for 2010-11. The increases represent 5 percent of typical gas and electric bills, and the telecom rate was upped to 6 percent from 3.5 percent.
The measure to be considered Tuesday would extend the sunset to April 30, 2012, to coincide with the beginning of the village's budget year.
The sunset clauses contained a provision for periodic review to determine if the taxes could be reduced or eliminated if the financial picture improved. But that hasn't happened.
"We still have employees with furlough days so there are a lot of things ahead of us," Wesolowski said.
Laying off four employees, shifting four others from full to part-time, continuing a hiring freeze and imposing a day off a month without pay for all nonunion employees were among the measures taken last spring to balance the budget.
Chief among the concerns has been a continuing erosion of sales tax revenue, which has been dropping for years.
Sales taxes have shown slight improvement the last year but the totals are still low, Wesolowski said. And, the amount received from state income tax continues to decrease, making a utility tax extension necessary, the village board has been told.
Since enacting the taxes, the village has restructured the bond debt for the Libertyville Sports Complex, which will reduce payments by about $1 million per year the next four years.
The sale of the Golf Learning Center and Family Entertainment Center components of the complex are expected to provide millions of dollars to offset the debt, but the commercial development market remains stagnant.