Excerpts from ChicagoTribune.com:
As the state of Illinois faces a complex first budget under Governor Bruce Rauner, local governments are feeling the pressure. In April, Libertyville’s trustees decided to delay several key financial decisions, unsure of how the new budget would impact their town. Six months later, they’re still uncertain about what the state will do—but they’ve finally taken action on some pressing needs.
Among the deferred decisions were hiring a new deputy fire chief, expanding the salt storage silo, funding a survey of downtown buildings for the historic preservation commission, and reducing the electric utility tax. These choices reflect the uncertainty surrounding state-level fiscal policies, especially as Rauner proposed freezing property taxes for two years and keeping half of the municipal income tax permanently.
At the time, Finance Director Patricia Wesolowski estimated that the loss of income tax would amount to $1 million annually, with an additional $600,000 in lost property tax increases over two years. While those proposals seem to have stalled, a new issue has emerged: Illinois is now withholding around $660,000 in various taxes, including $440,000 in 911 fees, $150,000 in gasoline sales tax, and $70,000 in use tax—collected on items like cars purchased outside the state but used within Illinois.
The state was expected to pass a budget by July 1, but Rauner has refused to sign any unbalanced plan. With no resolution in sight, Illinois has stopped paying many of its bills and halted the redistribution of tax revenue it collects on behalf of local governments.
In February, Libertyville signed a two-year contract to provide fire services to the unincorporated area of Knollwood, just east of I-94. The department had eliminated a deputy chief position a few years ago after a retirement. Filling that role would cost about $150,000 in salary and benefits, and the individual would serve both areas.
The contract includes $100,000 in annual payments, with Libertyville covering $50,000. It anticipated 100 calls per year, but so far, the department has responded to 102. Despite ongoing concerns about how much money will flow from Springfield, trustees agreed to fill the position.
"Chief Carani is stretched pretty thin, and that’s not healthy for an organization," said Village Trustee Todd Gaines.
Since 2009, Libertyville has built up a reserve fund of $4.2 million—above the recommended level—through new taxes and sales tax returns. In April, trustees considered using part of this reserve to pay down construction debt early and allocate another portion toward underfunded police and fire pensions, which have been hit hard by recent benefit increases and longer retiree lifespans.
That decision was also postponed, and on November 10, trustees opted to wait further, fearing that the funds might be needed if Illinois continues to withhold or indefinitely stop redirecting tax revenues.
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