Village Approves Budget With New Increases

Village Approves Budget With New Increases

In order to pass a balanced budget for fiscal year 2018/2019, Village of Northbrook Trustees took action to raise new revenue to plug a projected deficit. The approximate $94 million budget includes an increase in the sales tax and an increase in ambulance fees as well as sewer and water rates.

According to Village officials, operating expenditures have remained stable for the past few years and are projected to remain flat in the coming fiscal year. Budget documents indicated that total operating expenses are expected to be .8% lower than a year ago. There is no planned increase in staff.

General Fund revenues from sales tax, property taxes, township road and bridge tax, licenses and income tax were reported as relatively stable in the Village budget documents. However, one exception is the telecommunication tax, which has been in a steady decline since 2016. Industry competition, bundled plans and the continuing trends to drop land lines were some of the reasons cited for the decrease in the revenue source, with no indications that it will recover. In the past, permit revenues from new developments such as North Shore 770 and 1000 Skokie offset the loss in the telecommunication tax. However, with no planned new developments of similar size and scope, the structural loss was projected to create a $1 million per year shortfall and a structural deficit.

In addition, as Village officials looked at future budget challenges, there were concerns about diminishing major building permit revenue streams, capital needs and facility improvements, concern about loss of state revenues, Fire and Police unfunded pension liabilities and the current and future demand for excellent public services.

After considering options, a consensus was reached to increase home rule sales tax, which Trustees noted is in line with the prevailing rate charged by neighboring municipalities, including those with large shopping centers. Because it is anticipated to raise more than needed for the projected shortfall from the telecommunications tax, Trustees voted to direct a portion of the tax to the Capital Projects Fund. Annual transfers to the Fund will provide a funding source for improvements to the Village’s aging police, fire and maintenance facilities.

The additional income from the sales tax increase also allowed the Village to abate $241,630 of the property tax increase approved in December 2017, and keep the General Fund levy flat in FY 2019/20.

To address concerns about Police and Fire pension obligations, the budget also includes an increase in the ambulance transport fee for both residents and non-residents. The additional $400,000 a year in additional revenue will be applied to paying down the unfunded pension liabilities. Trustees noted that this should increase the funding ratio and help maintain the Village’s Aaa bond rating, which attracts lower rates on bond issuances.

The budget also includes scheduled rate increases in the water and sewer. A deferred 20% increase from 2016 is scheduled to go into effect this month. According to Village documents, Northbrook’s rates are among the lowest of area communities including neighboring Deerfield, Glenview and Wheeling.

Commenting that tax and fee increases are never the first choice, Village Trustee Kathryn Ciesla, Chair of the Administration and Finance Committee noted, “There are no easy or obvious expenses to cut without impacting the quality of service. While tax rate and fee increases are not ideal, we feel confident in our recommendation to prioritize high-quality, reliable and consistent service.”

The fiscal year calendar begins May 1, 2018 and ends April 30, 2019. For more information visit www.northbrook.il.us.

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