Prospect Hts. voters to decide $5.5 million bond and sales tax increase

Prospect Heights voters will be asked to approve $5.5 million in bonds to pay the deficit in the city's police pension fund, as well as to increase sales tax by one-half percentage point.

The city council voted unanimously Monday night to put the two questions on the April 5 ballot.

The bonds — for an amount almost identical to the amount the city is in arrears — would probably be spread over 10 years, said Mayor Dolores “Dolly” Vole, but she could not say how much this would cost the average taxpayer each year.

If the bonds are approved, the $400,000 to $450,000 that is now being spent annually from the general fund to pay the unfunded balance in the pension fund could be used for services to residents, she said. The city's general fund is about $6 million.

The city's only property tax is to pay the current contributions of about $200,000 to $240,000 annually to the police pension fund, and that would continue, said Vole.

“When you issue a bond, it's a temporary tax,” said Vole. “When you put on a property tax, that's forever. Very rarely are property taxes rescinded.”

The total retail sales tax in the city is currently 9 percent, including the one-half percent for the city.

The city would collect 1 percent if the voters approve in April. The 9.5 percent sales tax would still be lower than many neighbors, said Vole. This would bring in approximately $200,000 more to the city each year, she said. The vote is necessary because Prospect Heights is not a home rule city.

The city laid off six police officers last year after voters in 2009 rejected a property tax to fund the department. Last fall voters approved a $15 million bond issue that will mainly be used for street repair and rebuilding.

All 14 police officers remaining on the force could retire next year if they wish, said Vole, although only five would be 50 or older and thus eligible to immediately collect a pension.

The council, which will work on the budget for the next fiscal year on Monday, Jan. 17, is facing a shortfall of at least $240,000, said Vole.

She said preliminary figures from the U.S. Census Bureau show the city's population has slipped under 16,000. In the previous census it was 17,100. That will reduce state and federal funding.