Trustees Pass FY11/12 Budget; Warn That State Money Woes May 'Come Home to Roost'

In approving the fiscal year 2011/12 budget Tuesday, Northbrook trustees praised the village’s financial health but warned that the state’s budget crisis might eventually touch Northbrook as well. 

“We’re sitting here in Illinois, and Illinois has not solved its problems,” said Trustee James Karagianis. “Eventually those problems will come home to roost.”

For the time being, however, Karagianis and other trustees said Northbrook was in good financial shape, due in part to cost-cutting last year, when departments were consolidated and some staffing cuts were made, as well as to prudent planning over the long term.

Trustees described this year’s budget as very lean. General fund expenditures, which cover the majority of city services, were reduced in the fiscal year 2011/12 budget by $243,831 from fiscal year 2010/11.  The village’s general fund reserves are also maintained at 47 percent, well above the city’s minimum of 40 percent. The fiscal year 2011/12 budget also calls for no salary increases, although the village’s collective bargaining contracts, which cover more than 70 percent of its workforce, expire April 30—meaning that Northbrook may have to dip into its reserves if union workers negotiate higher pay, according to Finance Director Jeff Rowitz.

Services will be maintained at current levels, Rowitz said, which meant that Northbrook had to dip into its reserves for $568,000. That’s because the village board approved a measure not to increase property taxes this year despite the fact that Northbrook is required to increase funding to its police and firefighter pension funds, he explained. 

Rowitz cautioned that revenues this year and moving forward would be reduced by the 2010 U.S. census, which determined that Northbrook’s population had fallen by 3.6 percent. He estimated that meant that the village would receive $150,000 less per year from the state, a figure that the current budget takes into account.

Trustee Todd Heller said that despite the necessity of a tight budget, the board had to look forward and be careful not to put off necessary projects. He cited the village’s water main system, which is on a 140-year replacement cycle and has resulted in an increasing number of water main breaks in the past few years. This year, the village has set aside money to fund an update with a water rate increase of about $80 per year per resident. 

“While we look like we are in great financial shape…we have to be careful,” he said. “Isn’t this what happened to the state of Illinois? They kept putting off and putting off pension requirements until it became too late.” 

President Frum said she, too, was concerned about what would happen with the budget in the future.  

“Although it is one of the leanest budgets I have seen,” she said, “I’m deeply concerned about the future and about the possibility of service reductions in Northbrook due in large part to the state budget crisis.” 

“What has not been anticipated in this budget is the state’s possible diversion of village revenues,” she added. “In attempts to balance the state’s budget, several legislators have submitted proposals, which could take away 30 percent or even more of state-collected local revenues.”

Those revenues include motor fuel tax, income taxes and use tax, according to Frum, and have been traditionally collected by the state but distributed to municipalities.

“The state legislature cannot reasonably pass their fiscal problems on to us by diverting funds to which we are entitled,” she said. “The state legislature must not place the burden of their financial ails on the backs of Northbrook citizens.”