New utility tax in Lake Villa

Saying they've exhausted every option to fill a budget shortfall, Lake Villa village officials are poised to impose the town's first utility tax.

Mayor Frank Loffredo said the 5 percent tax on natural gas and electricity is a last resort and something village leaders regret having to do.

"We didn't want to do this, but it is our only recourse," Loffredo said Friday. "We've cut as many ways as we can, and many of our revenue streams have been spotty or have dried up completely."

Loffredo said the tax could generate nearly $500,000 annually. Estimates indicate the average residential customer could see an increase of $8 to $12 per month. Loffredo said they are waiting for data from ComEd before estimating the cost to a typical business.

The tax will likely be voted on at the Feb. 10 village board meeting. It will take at least 90 days before the village collects the funds.

Lake Villa joins Antioch as one of the latest northern Lake County towns to impose a utility tax for additional revenue. Antioch officials signed off on their tax in November. Officials there expect it to generate $1 million annually.

Loffredo said his village has made substantial budget cuts, but still faces a nearly $300,000 shortfall in the 2010-11 fiscal year. The overall budget is $5.5 million.

"We cut back on overtime, left job vacancies unfilled, had the police department use more part-time positions and put projects on the back burner," he said. "Given that, we are still maintaining the essential services but doing it with less people. The tax is our only recourse."

The tax fills a need in the short term, but Loffredo said it's not going to be the magic bullet.

"It's not the answer to the problem entirely," he said. "Unless things turn around in the economy, the future projections are not good either."