Tri-Cities face tough budget choices
Faced with falling sales tax revenues, several Tri-Cities-area communities are predicting tough decisions ahead as they begin budgeting for 2009.
In Batavia, sales taxes are down some $435,000 from last year, prompting officials recently to propose cutting seven city jobs by June. In September, 25 Kane County employees were given notice they were being laid off - also the result of plummeting tax revenues.
Not every community has assessed the damage, but officials agree they expect anything but a rosy financial picture for the coming year.
"Everything will be on the table," Sugar Grove Village Administrator Brent Eichelberger said of forthcoming belt-tightening.
In Geneva, officials said there are currently no plans for layoffs but the city might have to put off projects like the downtown master plan for which they have budgeted $75,000 in consulting services. The potential cut would reflect a 5 percent drop in sales taxes budgeted as revenue.
"We would like the project to stay on the list and we had hoped to make partial payments over two budget years," City Administrator Mary McKittrick said. "But I don't know if we'll be able to do that. We're trying to be conservative and maintain core services. We're taking day by day and week by week."
Batavia, meanwhile, is grappling with its own sales tax drop of nearly 6 percent, which is only exacerbated by suffering investments in the municipal retirement fund, said Financial Director Peggy Colby.
"After making all of the cuts we possibly could, we still weren't within a reasonable number so we had to look at eliminating certain positions," Colby said, noting that residents should not notice a change in city services. "It's certainly not anything we want to do or have had to do before."
Colby said officials also are "very concerned" about how property tax revenues could look in 2010, as annual assessments catch up to the ongoing economic downturn.
At the county level, falling sales tax revenue, income tax revenue and interest income revenue all fed into the layoff of 25 health department employees that will take affect Nov. 30.
Sales tax revenue to the county has fallen behind last year's totals every single month of 2008. Income tax revenue is down 11 percent from 2007, speaking to an unemployment rate of 7 percent in many local communities. Interest income on the county's savings is only about half of what it planned on earning.
The village of Sugar Grove has delayed hiring for some positions but is not planning any layoffs, according to Eichelberger. The village currently is preparing a midyear budget review (the fiscal year ends April 30) for the village board to scrutinize in December.
Sugar Grove anticipated hundreds of new housing starts annually just three or four years ago. But the village cautiously budgeted revenue from only 79 housing starts this fiscal year, each representing a net revenue of about $2,400. So far this year, fewer than 10 housing permits have been issued.
"Most of that revenue goes to capital improvements," Eichelberger said. A year ago the village shelved plans to build a new, multimillion-dollar municipal center. Last month, the board delayed a decision on a $700,000 expansion of the village's crowded police facility.
In St. Charles, city spokeswoman Beth Mund said officials are still too early in the budget process to make any predictions. Records show the city is experiencing a sales tax drop of about $300,000 for the first time in recent history, but property taxes are up $500,000 due to new construction.
• Daily Herald staff writers James Fuller and Nancy Gier contributed to this story