Elk Grove mayor: No municipal property tax increase next year

At a time when even retail mecca Schaumburg is buckling under economic pressure that could force the town's first municipal property tax, neighboring Elk Grove Village promises it won't increase its 2009 property tax levy.

It's the third year in a row the village will not be increasing its portion of the property tax levy, Mayor Craig Johnson said Monday.

The village that boasts the lowest combined property tax rate in Cook County - 5.585 - has seen monthly sales tax revenues dip by $400,000, or $4.8 million for the year, on top of declining property tax revenues.

For the past two years, the village has been dipping into its reserves to make up for revenue shortfalls. The fund balance that was at $19 million at the beginning of the current fiscal year is expected to drop to between $14 million and $15 million by April 2010.

"That's what the rainy day fund is for," Johnson said. "(The fund) was growing for the five years before that. We save money during the good times. We use it during the tough times. No one thought (the economic crisis) would last as long as it has."

Johnson expects officials will go back to that well and borrow $3 million for 2010-2011 operating expenses.

Yet, officials can't allow that fund balance to dip below $11 million to $12 million, if they hope to maintain at least four months worth of operating expenses in reserve. The fund is expected to be at that level by April 2011, Johnson said.

"That's why we're hoping (the economy) comes back," he said. "If it doesn't, we can't go forever without raising property taxes. But we try to protect residents as much as we can."

That's primarily why officials chose not to cut community events such as the summer concert series, Fourth of July fireworks and parade, Rotary Fest and tree-lighting ceremony, Johnson said.

To offset decreasing revenues this year, some vacant employee positions will go unfilled and certain jobs will be consolidated to save about $500,000, Johnson said.

Johnson said the total 2010-2011 village budget could be up to $75 million - a decrease from the current 2009-2010 budget of more than $85 million. Next year's operating budget also is expected to go down from $43 million to roughly $40 million.

A public hearing on the proposed 2009 property tax levy of roughly $8.7 million is scheduled for Dec. 8. The village board is expected to approve the levy the same night.