Schaumburg property tax levy may fall
Schaumburg's third property tax levy could fall about 6 percent lower than the second, according to new budget recommendations.
If the projections bear out when the levy is approved this fall, it would continue the trend begun last year when the village's second levy was 4.4 percent lower than the first.
“Again, this is us keeping our promises,” said Trustee George Dunham, who chairs the village board's finance committee. “We promised people to reduce or even eliminate the property tax and this is the next step in that process.”
The continual shifting of the tax burden caused by appeals and assessments makes it near impossible to calculate the precise impact the falling levy will have on individual taxpayers, Village Manager Ken Fritz said.
Schaumburg's first levy, approved in December 2009, totaled $23.7 million — helping make up for declining consumer taxes and replenish reserves that had fallen to an all-time low.
But the effect of cost cutting and improved revenues allowed the second levy, approved in September 2010, to drop to $22.7 million.
Based on the recommended budget and forecast slight improvements in the economy, the next levy is projected to drop to about $21.3 million.
“This is our budget,” Fritz said. “If it holds true, this is what we can do.”
The village board will meet to review and possibly tweak the recommended budget during a committee of the whole meeting at 6:30 p.m. April 18, in the lecture hall of the Prairie Center for the Arts.
The final budget, which covers the period between May 1, 2011 and April 30, 2012, is then expected to be approved at the April 26 village board meeting.
Despite increases in union-related labor costs and pensions, the village's general fund is budgeted to be 1.1 percent lower in the next budget than in the fiscal year ending this month.
The budget is just beginning to benefit from some cost and labor reductions that were made in the past, Fritz said.
“Schaumburg is a big organization,” he explained. “It doesn't turn corners on a dime.”
Slight improvements in both hotel and sales taxes are expected to be of help to the village's recovery, Fritz said. The village is expecting a 7.3 percent increase from combined local and state sales taxes in the upcoming fiscal year.
The budget projects a $4.9 million surplus to end the year, the equivalent of about a month and a half of operational costs. The following year is projected to generate another $5.5 million surplus.
Reserves are needed to counteract unknowns in both the economy and state funding, Fritz said.
From the 2006-07 to the 2009-10 budget years, the recession depleted the village's reserves from $26 million to $9.8 million.
Those reserves were hoped to help the village ride out the downturn, but they had reached nearly rock bottom when Schaumburg's first property tax was enacted 16 months ago, Fritz said.
The village is expected to have a healthier reserve of $23.2 million by the end of April 2012, about $10 million of which is coming from the 2010-11 year with the assistance of the property tax, he added.