Here are a few thoughts from a casual observer.
The announcement that a one-time payment to the city actually resulted in a budget surplus for the last fiscal year does not change the overall dynamics of a structural budget issue. But if there was ever an inconvenient time to receive more money, that was it.
The Elgin City Council had just passed a round of tax and fee increases to cover the projected shortfalls resulting from a double whammy of declining property values and a devastating decline in revenue from the Grand Victoria casino.
As we reported on BocaJump, the state figures show the GVC revenues have fallen off a cliff since the River Casino opened in Des Plaines. Property values in Elgin have declined in some cases as much as 40 percent, less in some areas, which severely impacted the city's primary funding source, property tax revenue.
In order to maintain the city's pristine credit rating, it was necessary to diversify income streams, hence the garbage pick-up fee, liquor taxes, elimination of senior property tax rebates, etc.
Then come an unexpected payment and the city shows a surplus for last year. One-time payments don't solve long-term budget issues, which is why trying to balance the budget by selling excess property or city facilities is disastrously wrong.
But look for the words "tax increases" and "surplus" to loom large in the upcoming municipal election.
As far as budgets go, I know a little about them, having managed a department at the Courier News for 15 years. I won't pretend that experience translates to municipal budgets, but I do know this: it is an immutable truth in every budget in every department of every corporation, municipality or business that department heads either spend the money in their budgets or they lose it next year.
If you have $100,000 left at the end of the year in unspent money because of superior management practices, deferred purchases, open positions or unfilled equipment needs, you will not be rewarded for having saved the company/city money. You will, instead, have $100,000 less in next year's budget. "You didn't spend it this year so you must not need as much."
So to protect the next year's budget, money is spent. It will be Elgin City Manager Sean Stegall's responsibility to be sure department heads are using budget money properly and the council will have to closely monitor through him that department heads are not spending budgeted money to create next year's need. But budgets are a tricky thing to manage because certain costs cannot be accurately estimated, such as overtime for public works, police and fire. Are we going to have three major snowstorms next year? Four major fires?
Lastly, Elgin Mayor David Kaptain at a recent Liquor Control Commission meeting suggested using some of the $500,000 expected from the new liquor tax to fund expanded drug abuse prevention programs and roadside safety checks.
Using sin tax revenue to fund programs to prevent those crimes from occurring is a progressive idea.
Except for one thing.
The new taxes and fees were enacted to fund the CURRENT city budget, not enact new programs. Elginites were told the city needed this revenue to maintain services and programs. If the money from these tax hikes is spent to expand or create new spending, support for the council will quickly vanish.
Not a bad idea, just perhaps, not the right time.
The announcement that a one-time payment to the city actually resulted in a budget surplus for the last fiscal year does not change the overall dynamics of a structural budget issue. But if there was ever an inconvenient time to receive more money, that was it.
The Elgin City Council had just passed a round of tax and fee increases to cover the projected shortfalls resulting from a double whammy of declining property values and a devastating decline in revenue from the Grand Victoria casino.
As we reported on BocaJump, the state figures show the GVC revenues have fallen off a cliff since the River Casino opened in Des Plaines. Property values in Elgin have declined in some cases as much as 40 percent, less in some areas, which severely impacted the city's primary funding source, property tax revenue.
In order to maintain the city's pristine credit rating, it was necessary to diversify income streams, hence the garbage pick-up fee, liquor taxes, elimination of senior property tax rebates, etc.
Then come an unexpected payment and the city shows a surplus for last year. One-time payments don't solve long-term budget issues, which is why trying to balance the budget by selling excess property or city facilities is disastrously wrong.
But look for the words "tax increases" and "surplus" to loom large in the upcoming municipal election.
As far as budgets go, I know a little about them, having managed a department at the Courier News for 15 years. I won't pretend that experience translates to municipal budgets, but I do know this: it is an immutable truth in every budget in every department of every corporation, municipality or business that department heads either spend the money in their budgets or they lose it next year.
If you have $100,000 left at the end of the year in unspent money because of superior management practices, deferred purchases, open positions or unfilled equipment needs, you will not be rewarded for having saved the company/city money. You will, instead, have $100,000 less in next year's budget. "You didn't spend it this year so you must not need as much."
So to protect the next year's budget, money is spent. It will be Elgin City Manager Sean Stegall's responsibility to be sure department heads are using budget money properly and the council will have to closely monitor through him that department heads are not spending budgeted money to create next year's need. But budgets are a tricky thing to manage because certain costs cannot be accurately estimated, such as overtime for public works, police and fire. Are we going to have three major snowstorms next year? Four major fires?
Lastly, Elgin Mayor David Kaptain at a recent Liquor Control Commission meeting suggested using some of the $500,000 expected from the new liquor tax to fund expanded drug abuse prevention programs and roadside safety checks.
Using sin tax revenue to fund programs to prevent those crimes from occurring is a progressive idea.
Except for one thing.
The new taxes and fees were enacted to fund the CURRENT city budget, not enact new programs. Elginites were told the city needed this revenue to maintain services and programs. If the money from these tax hikes is spent to expand or create new spending, support for the council will quickly vanish.
Not a bad idea, just perhaps, not the right time.
