$13 million deficit looms in Elgin

Elgin’s budget woes are more serious than anyone imagined.

Officials estimated a structural deficit of $4.5 million starting in 2012 but found out this week the actual number will fall between $10 million and $13 million.

Official numbers from the Kane County Assessment Office shows a drop of 20 percent in property values for Elgin homes. The massive decline is unprecedented in the city.

Cook County assessments aren’t in yet, which creates an incomplete revenue picture.

“While our budget projections over the past two years have been based on a significant decline, this new data demonstrates that property values in Elgin have been in a complete free fall,” City Manager Sean Stegall said in a news release.

Lower property values, tied to a fixed tax rate of $1.92 per $100 of assessed value, means the city will get about $12 million less this year than it did last year.

A Budget and Financial Planning Task Force met in August and September to help city officials make the tough decisions this budget season. The group ultimately recommended cuts, cautioning against any new taxes on already overburdened residents.

But the official values for Kane County properties changes everything.

“To think we’re just going to do this with cuts now is not realistic,” Mayor David Kaptain said.

Kaptain said the budget task force did its job but worked under the assumption of a much smaller deficit. The scope was on fixing a smaller problem, he said.

Stegall is expected to submit a proposed budget Nov. 8, when council members will take up the discussion. A variety of revenue increases will be on the table, including fee changes and extra taxes.

Kaptain said it will take a long-term vision to solve the deficit, one that needs to go beyond quick fixes like property sales that would earn a one-time profit rather than sustained revenue.

Council members plan to schedule a retreat in November to discuss their options as well as a Truth in Taxation hearing at the beginning of December. The council is required to balance the city’s budget and must do so by the end of the year.