W. Dundee official: Good news in failure

When West Dundee voters said no last Tuesday to a real estate transfer tax in the village, many residents were left wondering what's next for the village's ailing budget and what it means for village taxpayers.

On Nov. 4, West Dundee 1,195 voters rejected a tax at the rate of .005 percent of the sale price of a home within the village, paid by the buyer of the home. Basically, if you were a resident of another village buying a home in West Dundee, you would have paid a tax of $5 per $1,000 of the home's value. For example, tax on a $250,000 home would cost $1,250.

In this economic climate, it is not surprising that voters said no. No one wants to pay more taxes. Plus, with home sales in decline, those that are potentially looking to buy don't want to pay more in the form of a tax. What was surprising was the margin between those who voted yes and those who ticked the no box. It was a pretty close race.

A total of 857 votes decided the referendum's failure.

While 1995 voters said no, 1138 said yes.

Despite the referendum's failure, Village Administrator Joe Cavallaro said the slim decision was positive.

"It is a testament to West Dundee and the resident's understanding of the financial composition of the community," Cavallaro said.

He added that all referendums in Kane and DuPage counties that involved taxes, were denied.

"All taxes were defeated," Cavallaro said. "With the economic climate and the real estate market it is a bad time to be asking for tax increases. So, from the community's standpoint we understand."

But that doesn't mean some kind of tax increase is not in the works. The village must find a way to fill a $375,000 budget gap in its 2008-2009 budget. Cavallaro attributed the deficit, which is a first for the village, on a slowing economy and a decrease in sales tax revenues.

While revenues are expected to total $8 million this year, the village's expense line could reach $400,000, Cavallaro said.

The real estate transfer tax could have netted the village about $200,000 annually, Cavallaro said.

Other options that the village had previously considered prior to the real estate transfer tax include a food and beverage tax, an added waste collection or a property tax levy.

A trash collection fee would potentially net the village an additional $475,000 per year. Residents currently pay a fee through their property tax bill.

Meanwhile, raising the food and beverage tax from 1 percent to 5 percent would raise about $300,000 per year.

The village's property tax levy would go up from its current 75 cents per $100 of equalized assessed value, Cavallaro said.

"The problem is we have been working from a balanced budget for the past couple of years and there are not a lot of reductions left that we haven't already taken that won't affect the level of services to the community," Cavallaro said. "

The village will discuss the new rate at Monday night's board meeting.