Cuts, tax increases may be in order for Oak Park in 2011

Preliminary budget numbers show a $1.7 million deficit

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By Marty Stempniak

Staff Reporter

Early budget numbers are in for Oak Park Village Hall, and it appears the village government may face a $1.7 million deficit next year if cuts aren't made or tax increases implemented.

Trustees were given preliminary budget numbers for 2011 at a meeting on Monday, to start thinking about next year's financial picture. Early estimates say that village hall's expenses will outpace revenues by about $1.7 million, said Chief Financial Officer Craig Lesner.

To bridge the gap, Lesner and Village Manager Tom Barwin were suggesting that Oak Park dip into its $2.2 million "rainy day" fund balance. Trustees, however, seemed loath to try that idea, and Lesner said he will instead explore other ways to balance the budget, whether through trimming expenses or increasing taxes and fees.

"I'd rather make, as we have the last couple of years, some pretty hard decisions, now," said Village President David Pope.

Cuts would be tough though, Barwin said, since village hall has already reduced its workforce by 70 people, or about 20 percent, over the last few years. Some possibilities might include keeping a deputy police chief position vacant for another year, or eliminating funding for four parking enforcement officer positions that are currently not filled.

Village expenses are expected to increase by about $6.6 million next year, up to $49.6 million in 2011. Officials said that uptick is caused by various factors, including a 5 percent jump in health care costs, salary increases, and higher contributions to the police and fire pension funds. Anticipated salary increases are built in for certain employees, but Trustee Jon Hale suggested those be removed, so village hall isn't beholden to them.

"If you budget something, you're going to have to pay it," said Hale.

Barwin countered that some of those pay increases aren't negotiable. For example, police and firefighter salaries are bound by arbitration, under Illinois law.

Lesner said the village is looking at a roughly 2 percent increase to Oak Park's property tax levy. However, all that money would go toward increased contributions to the police and fire pensions, and not the village's general operations.

Trustee John Hedges expressed worry about village hall cutting too close to the bone, and said they may need to explore upping property taxes to help cover the gap in village operations.

"I don't know that we necessarily want to take that off the table, as we have in the past," he said.

On the other side, Hale said it's still the wrong time to put more pressure on taxpayers. In anecdotal conversations with residents, he didn't recall hearing any complaints about the levels of service that village hall is providing.

"I don't think it's the right time to raise people's taxes even more," he said, later adding, "There's probably more that can be cut. Until there's pain, I don't know if we can tell."

Lesner emphasized that the numbers are preliminary and changing daily. He and Barwin planned to come back to the village board later this week with alternative ways to bridge the gap, outside of dipping into the fund balance.

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Learn to Read  

Posted: October 8th, 2010 8:56 AM

The keywords are "used appropriately," which is debatable. It is interesting how property values have fallen by a greater percentage near DTOP in the last few years, compared to south Oak Park. The study also says nothing about tax revenue or ROI of taxpayer money. Lastly, the study says nothing about using TIF money in wealthy communities.

JohnhasnoPoints from Oak Park  

Posted: October 7th, 2010 10:45 PM

Nice try Cindy, thanks for playing.

Adam Salzman from Oak Park  

Posted: October 7th, 2010 8:54 PM

It's easy to find contradictions if you quote chunks of text out of context. The issue is whether TIFs can be effective development tools w/ one benefit being an increase in property values. Your quotation from pg. 34 concerns commercial districts with "big box stores." On the same page, the authors note that mixed use commercial / residential districts have more beneficial effects. And the OP TIFs comprise more than just the FLW districts. The point is: when used appropriately, TIFs are useful.

Cindy Connor  

Posted: October 7th, 2010 3:38 PM

On page 34 it states that "houses near commercial TIF districts appreciated less than those further away." It states on page 10 that "governments maximize the value of increment when they designate TIF districts in areas where property values are initially low relative to other parts of the municipality but then grow at a rapid rate." I did not know that homes in the FLW district had low property values compared to other areas of Oak Park. Mr. Salzman, it seems that you contradicted yourself.

Adam Salzman from Oak Park, IL   

Posted: October 7th, 2010 11:11 AM

Mr. Barsotti and Mr. Points: I guess you both missed the link I posted to an independent academic study. papers/Seminar March 9 Merriman Paper.pdf. Pg. 34 addresses positive impact on property values. It's actually a very even-handed study. It notes that TIFs need to be well-tailored to community needs and have the right combination of uses in development (i.e. "mixed use")to positively impact property values. But it shows positive impact nonetheless.  

Posted: October 6th, 2010 3:31 PM

I read these threads in amusement. Why can't someone provide Mr. Barsotti with an "independent academic" study proving that TIFs are needed in Oak Park? Once that is done, that should end any debate. (BTW, Oak Park might have been a blighted community when the TIF was formed, but not when it was renewed.)

Cynthia Miller from Oak Park  

Posted: October 6th, 2010 2:57 PM

I just read all of these comments with great amusement and decided to take the challenge. I looked at the law. When the TIF was formed many of the area buildings certainly were dilapidated (1) and obsolete (2). Execessive vacancies existed (3). Utilities were definitely inadequate in the area (4) and inappropriate mixed uses existed (5). How soon we forget! There was a lack of community planning (6) and... wait, I only needed to find five. That wasn't tough.

David Barsotti  

Posted: October 6th, 2010 2:37 PM

Mr. Williams is correct, blighted is defined in 65 ILCS 5/11%u201174.4%u20113. Five or more conditions must be met for an area to be considered blighted and downtown Oak Park does not meet five of the conditions making the TIF district illegal. All we have now are empty statements by Mr. Williams, Mr. Salzman, and the Village Board supporting TIFs. I challenge these people to provide an independent academic study that proves TIFs are needed in a desirable and extremely wealthy suburb, such as Oak Park.

Thomas Williams from Oak Park  

Posted: October 6th, 2010 1:58 PM

Mr. Barsotti keeps asking Mr. Salzman if Oak Park is blighted. At best, Mr. Barsotti does not realize that "blighted area" is a defined term under the Tax Increment Allocation Redevelopment Act, and at worst he knows this fact but instead is trying to confuse the issue. The definition simply requires that certain conditions be met. TIFs are one of the only tools that local governments have for development. When used wisely, it's a very useful tool.

Adam Salzman from Oak Park  

Posted: October 6th, 2010 12:51 PM

Mr. Barsotti your statement that TIFs are only warranted in blighted communities is false. Statutes enabling TIFs make no mention of "blighted communities." Thus your assertion that TIFs are illegal is absurd by any reasonable analysis. Re: academic studies, please note: papers/Seminar March 9 Merriman Paper.pdf.Pg. 34, re: positive impact on property values is particularly relevant. SO--why do you support a backdoor tax increase?

David Barsotti  

Posted: October 6th, 2010 12:28 PM

Mr. Salzman %u2013 Oak Park is not a blighted community making the TIFs illegal under Illinois law. Please let us know if you think Oak Park is blighted. Again, please provide an independent academic study that supports your belief that a TIF is needed in a community that is not blighted. Assuming you cannot provide a study continues to prove that TIFs only subsidize the profits of developers and does not benefit Oak Park. Mr. Joravsky has research to support his claims, you have not provided any.

Adam Salzman from Oak Park  

Posted: October 6th, 2010 10:11 AM

Mr. Barsotti-- just who are these "most knowledgable individuals"? Ben Joravsky is a committed opponent of TIFs and is known NATIONALLY as such. How do the "Shops of Oak Park" and the revenue generated thereby THREE YEARS AGO represent the total value of each of the TIFs to the Community as a whole? And revenue generated by a TIF is just one measure of its benefit. How about lower crime rates, and increased property values? Not everything can be measured quantitatively.

David Barsotti  

Posted: October 6th, 2010 9:26 AM

Ms.Salzman-Your reality is nothing but a fantasy world. The link to the article is by one of the most knowledge individuals on TIFs and he did compare the before and after tax benefits of Shops of Oak Park. D200 might be in good shape, but D97 is not. Oak Park praises the benefits of the TIF, but no one has provided an independent study to support their claim. I challenge you to find one independent academic study that supports the need of TIFs in Oak Park or any suburb that is not blighted.

Adam Salzman from Oak Park  

Posted: October 5th, 2010 3:34 PM

Mr. Barsotti- the link you posted is not to a "study," but a 3-year-old newspaper editorial citing no objective evidence. Reality supports neither that writer's position, nor yours. TIFs have not placed Dist. 200 in terrible, destitute straits--they have plenty more cash than the Village. What we know for sure is that prematurely axing the TIF robs the Village of taking assertive action to expand its tax base. This will result in tax increases down the road. Why do you support higher taxes?

David Barsotti  

Posted: October 5th, 2010 1:48 PM

Mr.Salzman-The TIF was designed to help blighted communities and Oak Park is not a blighted community, thus the TIF districts are illegal. The TIF is a tax on everyone in Oak Park for it decreases revenues that would otherwise have been spent on vital services. I don't want my taxes to increase, but no one has provided a study that proves TIFs increase tax revenue in Oak Park. In fact, studies show that TIFs don't increase tax revenue ( they subsidize developer's profits.

Adam Salzman from Oak Park  

Posted: October 5th, 2010 11:47 AM

Mr. Barsotti, what happens to revenue over the long term when the Village can no longer stimulate the local economy using the TIF? Tax revenue, as well as property values may very well decline. So not only would the Village NOT get 100% of the money diverted from the TIF, but the yearly tax receipts of the Village would probably decrease over the succeeding years (post-TIF elimination). Then there will be no choice but to raise taxes. Are you in favor of a tax increase? If so, admit it.

John Murtagh from Oak Park  

Posted: October 4th, 2010 4:55 PM

During the last five or six annual budget rounds, we have heard "Everything is on the table." With D97 facing a incredible millage increase battle, the village staff cut to the bone, and more property taxes affecting anemic house sales,and a half decade of service cuts --- EVERYTHING should be on the table.

David Barsotti  

Posted: October 4th, 2010 12:44 PM

Mr. Salzman %u2013 The downtown TIF districts will eventually expire. The $8 million additional property tax dollars that will be gained with the elimination of the TIF will be paid every year. This will increase the funding for the Village, library, parks, and schools which will always for programs and improvements for years to come. The elimination of the TIF districts in Oak Park will not only improve services, but it will also make Oak Park a more financially stable community.

Adam Salzman from Oak Park  

Posted: October 4th, 2010 11:21 AM

Mr. Barsotti, the elimination of the TIF would close the budget gap in the short term. But once the funds saved from the elimination of the TIF run out, then what? They won't be replenished. The Village's share of property tax revenue alone won't be enough to make the kinds of improvements that most our residents have come to expect, and that make this Village a popular destination to live and visit. In the long term, this will lead to loss of revenue. Your analysis is wrong and short-sighted.

David Barsotti  

Posted: October 1st, 2010 2:33 PM

Trustee Johnson, You have obviously not looked at the TIF districts very closely. If you did you would notice that in 2008 the TIF districts generated almost $12 million in property taxes, but only $4 million goes to the taxing bodies. That leaves $8 million going to the TIF fund. $8 million will solve all the Village%u2019s budget problems, plus some. I just wish the Village Board was more educated on the subject. Just take a look at the reports (

Ray Johnson from Oak Park  

Posted: October 1st, 2010 2:22 PM

Mr. Barsotti,While I know some share your view that eliminating the TIF is a silver-bullet, it creates even more financial difficulties for the community and the Village.With the Village's share of the property tax about .10 on a $1.00, the 'one time fix' you propose poses a host of new challenges for the community in regards to expanding the tax base and further capital/infrastructure improvements.The TIF is a much needed tool in our development tool-box and we must use it with care

David Barsotti  

Posted: September 30th, 2010 8:51 AM

One area that no one in Village Hall recommended, is to eliminate the TIF districts in Oak Park. If the TIF districts are eliminated, more property taxes will flow to the Village and that money will close the budget deficit. There are millions of dollars in the TIF accounts that could be used to close any budget deficit.

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