Phone tax among options as Bloomingdale addresses shortfall

A phone tax is among the options Bloomingdale officials are considering as they try to fix a projected $1.7 million budget shortfall for the next fiscal year.

Finance Director Gary Szott told the village board Monday that while revenues are projected at $21.2 million, spending is budgeted at $22.9 million. Several factors, such as falling property and sales tax revenues, are causing the shortfalls, Szott said, and Bloomingdale is looking at several options to bridge the gap.

One way to boost revenue includes implementing a proposed telecommunications tax, which would charge 5 percent on the gross amount of home phone, cell phone and Internet service bills.

Village President Bob Iden said Bloomingdale is one of the last remaining towns in DuPage County that doesn't already charge such a tax. Officials said most DuPage towns charge 6 percent, with only a handful taxing at less than 5 percent.

The projected revenues from a new telecommunications tax would be roughly $1.5 million annually, said Szott, covering most of the anticipated shortfall. The village board must decide by March 20 whether to adopt an ordinance that implements the tax. If it passes, the charges would go into effect July 1.

But Szott said such new revenue isn't a reason for village officials to stop looking at income and expenses with a fine-toothed comb.

"It is important for residents to know we are constantly evaluating how we are providing services, which means looking at cost, efficiency and everything that goes into that particular service," he said.

Late last month, village leaders canceled Bloomingdale's annual Family Festival for 2010 in an effort to save about $100,000. At the start of this year, Bloomingdale also offered voluntary buyouts to employees and 10 people took the offer to leave by June 1, saving Bloomingdale about $500,000, officials said.

Szott said officials even are researching cost-saving measures for buying and using office supplies because in addition to the budget shortfall, the village is not seeing enough revenue to keep comfortable reserve funds.

"What we're doing today isn't the be-all, end-all (of cost savings)," he said. "There is a need to continue our work to see if we can reduce expenses."

Budget meetings will continue at 8 a.m. Saturday at village hall, 201 S. Bloomingdale Road.