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1. CuriousResident
   Member

   On the surface, the large majority of municipalities revenue comes from property taxes.

   Presumably the majority of them have operated in a "fiscally healthy" way in years past...and property values had never been higher and the taxes on them are continuing to increase (note the press about cook county increases on the latest tax bills).

   So what/where are the "structural deficits" originating from?

   Looking at Riverside specifically, there has not been any commercial revenue of significance in the last decade (that I'm aware of). So, there is no "big loss" there. With the exception of some capital programs (new public works, paving streets, etc) there does not appear to be any growth in government/services.

   So, what costs are increasing faster than tax revenue?

   Anyone understand the inner workings of this sad state of affairs well enough to lay it out for us?

   Posted Tuesday Oct 20, 2009 16:27 #

2. spatny
   Member

   We were told for years that wages, pensions, insurance, benefits were all increasing at a faster rate than taxes were allowed to rise, which is a max of 5% or the CPI, which has ben lower - very low - the last years. So expenses - especially wages and benefits for employees, which are more than two-thirds of our budget, increase more than revenue does, causing the gap to grow. Of course, hundreds of thosands of dollars were also spent on other things like TIF, TOD, Zoning, etc., and we are urged to pay substantial amounts as part of various grant opportunities, whch are sort of like signing up to buy something you could do without because you get some cash back.

   Riverside gets certain shared revenues from the State and they are way in arrears or whittling that down, so the total shortfall caused by rising costs and decreased revenues is what makes the structural deficit. It will continue to escalate until we trim our costs, meaning wages, benefits and pensions.

   Posted Tuesday Oct 20, 2009 16:42 #

3. mr
   Member

   Our budget is 8MM from what I have been told. If the village wasted 4MM over the last 5 years, and we were able to reclaim it, it would finance 6 months of operations.

   Some of us feel that every administration needs to make investments in infrastructure and plans for the future. For example, our water tower was a disgrace before it was renovated - with grant money. I hope everyone agrees that renovating the water tower was a good for our community. Given that viturally every community around us has at least one TIF, I don't feel that exploring if a TIF could have helped us was a waste of money. We are subsidizing every TIF in Cook County, so it would have been nice if these other communities were subsidizing ou efforts to improve our own community.

   Posted Tuesday Oct 20, 2009 17:19 #

4. mr
   Member

   Likely the serious probkem with expenses is the pensions and health care costs. Pubic employee pensions are totally out of whack with private industry. The municipal workers pension fund is totally funded by the municipalities. School teachers are funded by the state income tax revenue with smaller contributions by the school district and employee. I am not sure if police and fire pensions are funded at the state or local level.

   I hope everyone read the Sun Times articles about a month ago on public employee pensions. I am not sure to what degree they addressed the pensions of municipal workers, but my guess is that the pensions operate similarly.

   Posted Tuesday Oct 20, 2009 17:24 #

5. spatny
   Member

   Lots of things are nice to have, if you can afford them, but this is easily the worst set of economic conditions in the last half century or more. What we need at this time is a breather, say $500K more a year for three or four years. A tax increase maybe the only answer, but we need to look everywhere, at everything. Most of our CBD is service oriented likes banks, accountants, doctors, hairdressers - and they contribute very little or none at all in the sales tax department. Same with the MacNeal building, which was an S&L before. It's the best corner to attract outside traffic and it brings us almost nothing. Same with incentives paid to developers of overpriced condos, etc. that remain empty. We spent our money on the wrong kinds of projects. If home priced drop 15% more, and they could next year when the failure of commercial real estate everywhere could occur as it did in residential, many people that bought here in the last 4-5 years could be upside down and their lenders will look for more equity. So a tax raise should be the last resort. I like the water tower, but the Centennial project was sold to us as 80%-20% and it is now more like 50%-50%, and that may be beyond our ability to pay at this time. There are a lot of older people here that can't just pick up an extra tax burden with their investments bringing in almost nothing.

   For the past 30-40 years governments everywhere have offered wonderful pensions and perk packages on the assumption that the economy would always grow and carry the cost. Now we are holding an empty bag. I think we need to look for $1.5-2. mil at $500K a year for now until we see if the economy does improve in 2-3 years, before we burden the homeowners who can't carry more weight. That probably means service reductions or streamlining operations. People that can afford an increase should consider how many of their friends and neigbors can't, and may be just hanging on.I'm sure we all wish it were different.

   Posted Tuesday Oct 20, 2009 17:55 #

6. mr
   Member

   I guess we don't need to fix our leaky train station or our leaky town hall, as these could fall into the category of nice to have. That could save us lots of money.

   Posted Wednesday Oct 21, 2009 10:27 #

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