Lake in the Hills' 2016 budget projects higher revenues, taxes

Lake in the Hills is proposing a reduced property tax levy for the fifth consecutive year in 2016, according to village documents.

Officials propose collecting roughly $5.6 million as part of the proposed budget for fiscal year 2016, which begins Jan. 1. The village is anticipating a surplus of about $420,000 at the end of this fiscal year, which would grow its reserves to about $8 million - well above the threshold of 25 percent of operating expenses set by the board.

Revenues in the general fund, which covers day-to-day expenses, are estimated to be $17.5 million - about $500,000 more than the previous year. Expenses are projected at roughly $17.8 million, with some projects being carried over from this year.

The village is looking to hire an information technology manager and replace a part-time plumbing inspector with a full-time building inspector in 2016, contributing to the increase in personnel costs. Employees' health insurance costs, which are shared, are expected to increase by 10 percent effective July 1.

Some village taxes also are expected to increase next year.

The home rule sales tax is proposed to go up by 0.25 percentage point to 1 percent effective July 1. Officials say it's needed to maintain operations and fund longer-term capital expenditures, documents show.

Sales taxes - 1 percent base rate and the proposed 1 percent home rule rate - are expected to generate $4.1 million, which is an increase of roughly $270,000 over 2015 revenues.

Village President Paul Mulcahy said officials decided to increase sales tax versus property tax to soften the blow.

"It's our goal every year to somehow make this work without increasing real estate taxes," Mulcahy said. "Costco brings us a great deal of revenue, and much of that is from people who don't live here. It doesn't put the burden directly on our residents."

With the proposed increase, the village's combined general merchandise tax rate would be 8 percent as of July 1, similar to that in Gilberts, but lower than Carpentersville's (9 percent), Elgin's (8.25 percent in Kane and 9.25 percent in Cook) and West Dundee's (8.5 percent), and higher than Algonquin's and Crystal Lake's (both 7.75 percent). All these towns have commercial developments along Randall Road.

While retail sales have been increasing because of a positive economic climate, the loss of revenues from the defunct Dominick's grocery store and decreasing fuel prices have hurt the village, officials said.

Revenue from the village's use tax - imposed on tangible personal property purchased at stores - for the 2016 fiscal year is projected to increase by 9 percent, generating $734,000, documents show.

With the economy improving, the Illinois Municipal League is projecting towns will see an increase in income tax revenues next year. Lake in the Hills' budget includes $3.15 million in estimated income tax revenues - a more than 2 percent increase from the previous year.

Revenues from building permit fees are expected to increase next year due to the construction of 17 new homes, two commercial developments, and other commercial/residential projects. Collectively, these projects should generate roughly $155,000.

The village's telecommunications tax revenue is expected to decline - generating roughly $592,000 in 2016 - due to fewer landline customers.

Among the projects proposed for next year are the resurfacing of more than three miles of roads, and the potential construction of an elevated water storage tank and well/treatment plant - estimated to cost $5 million - to support potential development along the Route 47 corridor.

The village also will undertake the final phase of taxiway relocation at its municipal airport, which is scheduled to be completed in next year.

A public hearing on the proposed budget is scheduled before the Dec. 8 village board committee of the whole meeting, which begins at 7:30 p.m. in the board room at village hall, 600 Harvest Gate.