Schaumburg plans 1 percent cut to tax levy

Though Schaumburg officials again plan to make a 1-percent cut to the property tax levy first enacted during the recession in 2009, they say newer factors than that economic downturn are reasons the village will still rely on a property tax to make ends meet in 2019.

Village Manager Brian Townsend said rising pension costs, the impact of online shopping on sales tax revenues, and the state's financial struggles are major factors in keeping the property tax in place.

In fact, he said, had the village not imposed the tax in 2009, it might be necessary now.

While some new revenue sources allowed the village's finance committee to recommend the levy be reduced by $206,828 - from $20.7 million to $20.5 million - Schaumburg's economy has not yet rebounded as fully as some might think, Townsend said.

For example, Schaumburg's Renaissance Hotel and Convention Center, which generated an $8 million profit in 2008, is projected to generate a $6.4 million profit this year, Townsend said.

The new levy will include $9.7 million for police and fire operations - 16 percent of the police department's total costs and 20 percent of those for the fire department. This is a reduction from $10.2 million last year.

The levy also covers the final $1 million of repayment for bonds issued in 2010 for road improvements.

While police pension costs will rise slightly at approximately $5.4 million, firefighters' pensions will increase more measurably from $4.2 million to $4.4 million.

Schaumburg Finance Director Lisa Petersen said those costs were once covered by the village's more consumer-driven taxes, but some other revenue source would be needed today in the absence of the property tax.

The village anticipates receiving an additional $200,000 next year from its share of the state's 6.25 percent use tax, recently expanded to include internet transactions due to a Supreme Court ruling. This is nearly equal to the amount the levy will decrease.

Though the original 2009 levy remains the highest Schaumburg has ever had, the levy remained flat from 2014 until now out of concern for the impact of the property-tax freeze the state has been considering, Petersen said.

Village Trustee George Dunham, who chairs the finance committee, said the village board and staff have been working hard to keep their commitment to reduce the levy as much and as quickly as possible. Whether that could ever mean eliminating it entirely is hard to judge but a potential goal, Dunham said.

"I would love for that to happen, but not at the expense of the obligations that we have," he said. "I don't want to make promises I can't keep. We told the truth when we put in the tax in the first place and we continue to tell the truth."

The village board is scheduled to set the tentative levy Nov. 13 and approve the final levy Dec. 11.