DuPage County Board Chairman Dan Cronin unveiled a $586 million budget plan that raises employee wages but does not raise property taxes, even though local governments in Illinois can ask for a maximum increase of 5% due to soaring inflation.
As he prepares to step down after his third term, Cronin released his final budget proposal while reflecting on his legacy and urging his successor to “maintain a conservative and prudent approach to spending.”
The Republican from Elmhurst took over as county councilor in tightened mode, barely emerging from the throes of the Great Recession. The outlook for this year is considerably better: The county is expected to reap a $40 million surplus by the end of fiscal 2022. But Cronin is still treading cautiously.
“While our revenues are certainly better than in years past, we must recognize spiraling costs and supply chain disruptions that are impacting our ability to deliver services, just as they have an impact on the private sector,” Cronin said.
Due to the state tax cap, most local governments cannot increase the amount of annual property taxes they receive by more than the rate of inflation or 5%, whichever is lower.
But a 7% growth in the rate of inflation from December 2020 to December 2021 means local governments can raise their property tax to the maximum allowable level this year, according to the Illinois Department of Revenue.
“I’m sure some local governments will do just that,” Cronin said.
However, Cronin proposes keeping the county property tax rate flat “to even out the burden on all of us.”
The balanced budget proposal provides for a property tax of $70 million that would take into account the addition of new construction to the tax rolls. The owner of a home worth $250,000 pays about $132 a year in property taxes to the county. The DuPage government accounts for less than 2% of the average homeowner’s property tax bill.
But board member Jim Zay is pushing for property tax relief to lessen the impact of inflation on homeowners. Zay suggested a tax levy of $65 million. He cited federal COVID-19 relief and county cash reserves as reasons for a tax cut.
“I think it’s time to give our residents some savings because they’re hurting right now,” Republican Carol Stream said.
Cronin said he was “open and receptive” to the idea.
“I think that would require careful consideration, and I know we’re making a supreme effort to minimize our drawdown. I think our drawdown is pretty minimal as it is,” Cronin said. “We are very, very dependent on sales tax revenue, which from a tax policy perspective is probably not ideal.”
Sales tax revenues, the main source of the year-end surplus, were up $21.4 million, or 19.6%, from budget. The county said it raised $12.1 million in August alone, the second-highest month ever. Internet sales taxes, a relatively new source of revenue, were the main driver of the increase, officials said.
“We don’t believe this is a one-time event,” DuPage chief financial officer Jeff Martynowicz said. “We’ve seen trends that suggest what we’ve budgeted — $130 million in sales tax in 23 — is going to stay at that level, and we’re monitoring it very closely.”
Overall, budget planners originally projected the county would end fiscal year 2022 with $210 million in general fund revenue. The county will likely end up with more than $240 million. Spending is also expected to be $10 million under budget this fiscal year, which ends in December.
Cronin outlined plans to spend the unusually large surplus on big-ticket items to “eliminate millions of dollars of burden on future budgets.” Some of the extra money would pay for the following:
• $3 million for major renovations to a county-owned retirement home
• $2 million for transportation infrastructure
• $2.5 million to cover liability and insurance costs
• $6 million to replace the county’s existing financial system
• $3.25 million to replace aging vehicles
• $250,000 for the “Neighborhood Revitalization Program,” an effort to remove or repair dilapidated or abandoned buildings
The county’s total number of employees – 2,255 – increases by 10 net positions after staff cuts by the county clerk and the circuit court clerk. The state attorney’s office is adding 12 positions, including four prosecutors, to comply with sweeping criminal justice reforms.
Cronin’s recommended budget includes salary increases estimated at $6 million to help retain and attract workers to the county.
“We value our well-trained, highly skilled and professional employees, and recognize the importance of retaining them in a highly competitive marketplace,” Cronin said. “We are also painfully aware of the impact of high inflation rates on the families of our employees. The fact is that everything costs more. Earlier this year, gasoline prices soared. right now that the prices of groceries and goods are higher than we’ve seen in decades.”
Non-union employees would receive a 4% cost-of-living increase, instead of the usual 2%, paid in December. The county would also award a 2% merit increase in February 2023 to eligible individuals. In addition, full-time non-union employees earning $55,000 or less would receive “a one-time inflation adjustment.”
Board members have until the end of November to approve a 2023 budget.