Wheeling likely to raise property taxes, and others

Wheeling officials are considering layoffs and raising taxes and fees to plug a projected $5.3 million deficit next year.

Administrators are recommending various cuts and tax hikes for 2010, including eliminating more than 10 employee positions, a 15 percent increase to the village's property tax levy, raising the hotel/motel tax from 5 percent to 6 percent, and implementing a new vehicle sticker program.

Other options to increase revenue include raising the utility tax on electricity, food and beverage tax and sales tax.

Officials have discussed the impact of raising the village's property tax levy by either 10 percent, 12 percent or 15 percent. On Monday, village staff will recommend the board approve a 15 percent property tax levy increase for 2010.

Yet, Wheeling Village President Judy Abruscato said Wednesday it's not a done deal.

"We hope that we don't have to have it, but we don't know," she said, acknowledging that some increase is imminent.

Wheeling's present tax rate is 0.707. If the increase is approved, homeowners currently paying $5,000 in taxes would have an additional $72 tacked onto their bills for the village's portion of taxes.

Wheeling's proposed 2010 general fund budget is $34 million. The village's total budget is $76 million for all funds, including water and sewer, debt service, police and fire pensions, tax increment financing, and capital projects.

Wheeling Finance Director Michael Mondschain said the projected $5.3 million deficit next year is largely due to increases in state-mandated pension fund contributions.

"The village is trying to deal with the fact that its pension costs are going up over $1 million next year because of the stock market losses that occurred in the fall of 2008," he said. "And that's driving the need for this larger tax increase for the most part."

Still, other factors have contributed to Wheeling's deficit. The village is projecting a $2.6 million dip in sales tax and building permit revenues next year. Salary and health insurance costs also are expected to shoot up by more than $1 million.

Meanwhile, the village has been consistently dipping into its general fund reserves, which have dropped from $20 million in 2007 to $14 million in 2009.

The projected deficit for the 2009 fiscal year is $3.8 million, up from $2.2 million in 2007.

Though Wheeling increased its tax levy in 2008 by 6.25 percent from the previous year, the rate historically has been low, Mondschain said.