Official: Sleepy Hollow 'can't afford to have voters say no' to tax hike

Sleepy Hollow may ask voters again to consider a property tax hike.

On Monday, the village's finance committee recommended placing a question on the spring 2016 ballot that would raise the village's portion of residents' property taxes by one-third.

If voters approve the referendum, the village would reap an additional $180,000 annually from its more than 3,300 residents, said Mike Tennis a member of the finance committee. But the issue would likely have to be revisited within a few years, he added.

After analyzing Sleepy Hollow's financial situation, Tennis estimated that the village's needs are higher than what they are seeking from residents. To maintain a balanced budget, he said, the village would be justified in asking for an additional $228,000 per year - $140,000 for operating costs, $60,000 for road improvements and $28,000 for capital funds, he said.

For fear of voters shooting down the referendum, Tennis said, he recommended a smaller tax increase that would hold Sleepy Hollow over temporarily.

This would be the third time village officials have asked voters to approve a property tax hike in the past two years. More than 80 percent of voters voted against an 82 percent increase last April, and they denied a similar request in November 2014.

"The village can't afford to have voters say no again," Tennis said. "If they say no, it's going to have a serious impact on services, as well as personnel and village employees."

By the end of fiscal year 2016, which ends April 30, Tennis projected that the village will have a $98,000 surplus in revenue over expenditures. However, citing declining sales and utility tax revenues and increased personnel costs, Tennis said the village could be looking at a six-figure deficit by fiscal year 2018.

"What do you do when your operating costs start to exceed your revenue?" he asked. "You've got to hike the property taxes, and ... you've got to cut your costs."

The additional revenue obtained if the tax hike is approved would also go toward road improvements and the five-year capital fund, which is used for long-term expenses such as purchasing police vehicles and snowplows. Village President Stephan Pickett said earlier that without a tax increase, he expects that fund to be depleted within two to three years.

The village board will vote on the committee's recommendation next week.