Lake in the Hills maintains flat tax levy, increases sales tax

Lake in the Hills has adopted a flat property tax levy for the fifth consecutive year and a 25-cents sales tax increase.

The levy allows the village to collect $5.48 million in property tax revenues for the 2016 fiscal year starting Friday.

Revenues in the general fund, which covers day-to-day operating expenses, are estimated to be $17.5 million - roughly $500,000 more than last year. Expenses are projected at roughly $17.8 million, with some projects carried over from 2015. Officials anticipate a $260,000 deficit at the end of 2016, Finance Director Rich Hentschel said.

That deficit largely is due to budgeting for expenses that were supposed to happen in 2015 such as costs related to information technology, a new financial system, and communications equipment for the police, Hentschel said.

Officials said they anticipate a general fund surplus of about $424,000 at the end of 2015, which would grow its reserves to about $8 million - well above the threshold of 25 percent of operating expenses set by the board.

The village board recently approved raising the home rule sales tax rate by 0.25 percentage point to 1 percent to maintain operations and fund longer-term capital expenditures. The increase goes into effect July 1, Hentschel said.

Sales taxes are expected to generate $4.1 million - an increase of roughly $270,000 over 2015 revenues.

Revenue from the use tax - imposed on tangible personal property purchased at stores - is projected to increase 9 percent next year, generating $734,000. The village is starting to receive the backlog of 2015 motor fuel, use and gambling tax revenues from the state, Hentschel said.

The 2016 budget includes $3.15 million in estimated income tax revenues - a more than 2 percent increase from the previous year.

Revenues from building permit fees are expected to increase in 2016 with the construction of 17 new homes, two commercial developments, and other commercial/residential projects generating roughly $155,000.

Personnel costs will increase as the village looks to hire an information technology manager and replace a part-time plumbing inspector with a full-time building inspector. Shared employee health insurance costs are expected to increase by 10 percent effective July 1.