Libertyville recently approved a new budget for its upcoming fiscal year that includes the village-wide sales tax increase that voters approved in March and that, officials say, will help close a financial shortfall.
The ongoing ramifications of the coronavirus pandemic also influenced village board members’ decisions on the new budget for 2020-21.
While setting an effective date of July 1 for the new 1% non-home-rule sales tax, trustees also followed through on a campaign promise and repealed the village’s “1% Places for Eating” sales tax, which applies to restaurants in town.
The places-for-eating tax was set to expire June 30, but officials cut the expiration date by two months as part of an effort to give local restaurants some relief during the pandemic and Illinois’ stay-at-home order, said Mayor Terry Weppler.
“While restaurants are going through what they are (going through) right now, it makes it easier not to have to worry about this tax,” Weppler said. “Here, it was more paperwork for them.”
Weppler said the loss of revenue from the tax expiring two months earlier than planned will be negligible for the village because restaurants’ inability to make normal revenue right now.
During the meeting where the board approved the budget, Trustee Scott Adams, who also serves as president of the Green Oaks, Libertyville, Mundelein Vernon Hills (GLMV) Chamber of Commerce, estimated restaurants in the area generally are doing between 20 and 25% of their total business during the pandemic.
Going forward, revenue from the new 1% non-home-rule sales tax will begin to trickle into village coffers by October, according to Libertyville officials. Trustees also approved the creation of a separate fund for the new revenue — another village promise made before voters approved the tax referendum in March to promote transparency.
Revenue from the new tax should help fill a $2.5 million shortfall in the village’s future budgets that, officials say, is the result of projected costs for infrastructure projects during the next decade. The creation of the tax was approved via a referendum during the March primary election, earning the support of 58% of voters.
But officials caution that the pandemic and how long its disruptions last could force village officials to make even more changes to its new budget for the year.
The 2020-2021 budget totals about $66.5 million with expenses projected at about $62.3 million, which gives the village a projected surplus of $4.2 million, according to village documents.
The new budget also includes an increase of about $5 million in revenue compared to the previous fiscal year because of a proposed debt issuance for capital projects, documents show.
Residents also can expect to pay $49 more each year in utility charges because of increases to water and sewer services. The village’s operating budget is fully balanced, according to the village.
The village board also decided to increase its Simplified Telecommunications Tax, opting to keep the current 6% tax rate for another year. Without the board’s newly approved amendment, the tax rate would have declined from 6% to 3.5%.
In a memo, Finance Director Nicholas Mostardo said the new budget was calculated with the assumption the tax rate would stay at 6% because of “economic uncertainty at the national and state level.”
The extended rate lasts until June 30, 2021.
jnorman@chicagotribune.com
