Election 2012: Voters asked to approve new tax for police pension on March 20

By on March 9, 2012

by Lynn Meredith
ELBURN—On the March 20 ballot, voters will be asked whether or not to authorize the village of Elburn to levy a new tax. This new line item on the tax bill will cover the ongoing expenses of the police pension fund. The village is required by state statute to establish its own retirement fund, now that the village’s population exceeds 5,000 residents. It may not change the pension fund into a 401K or other retirement plan, but must follow the laws established in Springfield.

“Once the census came in, the village is required by law—and that’s in bold print—to establish for and on behalf of the Police Department its own fund, the rules and regulations of which come from state statutes,” Village President Dave Anderson said. “There’s nothing we can do about it.”

Prior to the census results, the Police Department, along with every full-time village employee, contributed to the Illinois Municipal Retirement Fund (IMRF). Police officers contributed 4.5 percent of their salary, and the village kicked in 11 percent of the employee’s salary. Now that the police are required to have their own pension fund, the officers put in 9.2 percent, and the village contributes 21 percent of the officer’s salary. This constitutes an increase that will be ongoing annually. The village is asking the voters to fund it with a new line item. Trustee Jeff Walter said that technically it is not a new tax.

“People should understand that this is not a new tax, only a replacement for the current levy for retirement that is already on the tax bill. The current levy is for IMRF and not downstate, so we have to ask again. If you look at a tax bill for any Elburn resident, you will see a line item for Elburn Village Pension. My understanding is that we can’t use that levy money now that we are in the downstate plan since the levy is for IMRF,” Walter said.

If approved, the line item will be on the tax bill every year for the established amount and will increase 3 percent or the cost of living—whichever is least—in the following years.

If not approved, the village says it will be looking where it can make further cuts.

“When I was elected three years ago, the economy had turned, and the board was faced with difficult cost-cutting decisions. At that time we cut positions, shut down a department and froze wages. Every year since, we have made hard decisions about cutting costs to balance an ever-decreasing income stream. Everything is on the table that can be on the table, and there are no sacred cows. Every line item faces a potential budget cut,” Walter said.

The cuts would come from the general operating fund. The board maintains its position to keep a balanced budget and not create a deficit.

“We are not like the federal government or the state government who feel it’s OK to operate with a budget deficit. The village must present and live within a balanced budget every year, just like you and I do,” Walter said. “There is no magic savings account we can go to for a bail out. Every line item in the budget that is not protected by a contract is subject to a cut.”

The village is limited by contract as to the cuts in the Police Department that they are allowed to make, so cuts will have to come from elsewhere.

“We will again, as we have in the past, consider reducing positions in the Administrative and Public Works departments, training expenses, office supply expenses, vehicle expenses-although we have not purchased or leased a new vehicle since I have been on the board-public service line items like street repair, snow plowing and public land maintenance and mowing. To say that service to the public will be reduced in some fashion is a fair statement,” Walter said. “It will be painful to the board as we make hard decisions and cuts. It will be painful to the staff as they have to absorb whatever cuts are made. Most importantly, it will be painful to the residents as they see services reduced across the village.”

The referendum question
Shall the Village of Elburn, Kane County, Illinois, be authorized to levy a new tax for police pension purposes and have an additional tax based on 0.09533% of the equalized assessed value of the taxable property therein extended for such purposes?
1) The approximate amount of taxes extendable at the most recently extended limiting rate is $659,933.87, and the approximate amount of taxes extendable if the proposition is approved is $822,698.87.
2) For the 2012 levy year the approximate amount of the additional tax extendable against property containing a single family residence and having a fair market value at the time of the referendum of $100,000 is estimated to be $31.78.