NOVEMBER REFERENDUM: QUESTIONS & ANSWERS
On the November 6 ballot, the Village of Barrington will pose three referenda questions to the voters for their consideration. The first question is binding; the second two are advisory. Please see below for answers to commonly asked questions about each referendum question.
(Binding Question #1)
Shall the Corporate Authorities of the Village of Barrington be authorized to impose a Municipal Retailers’ Occupation Tax and a Municipal Service Occupation Tax (which together are commonly referred to as “municipal sales tax”) within the Village in accordance with 65 ILCS 5/8-11-1.1, 5/8-11-1.2, 5/8-11-1.3, and 5/8-11-1.4, at a rate of 1% for expenditures on public infrastructure and/or for property tax relief?
(65 ILCS 5/8-11-1.2 defines “public infrastructure” as: municipal roads and streets, access roads, bridges, and sidewalks; waste disposal systems; and water and sewer line extensions, water distribution and purification facilities, storm water drainage and retention facilities, and sewage treatment facilities.)
Q: How much is the sales tax increase?
A: The increase is 1 percentage point. In Cook County, the current sales tax would go from 9 to 10 percent. In Lake County, it would go from 7 to 8 percent.
Q: How much of the sales tax actually goes to the Village of Barrington?
A: Only 1% of the current sales tax goes to Barrington. If the referendum passes, the Village would receive an additional 1%. Below is the current breakdown of how much of the total sales tax goes to various taxing bodies:
Q: Are all currently taxed sales subject to this increase?
A: By law, this 1% sales tax increase is NOT applicable to vehicles, or grocery or prescription drugs.
Q: Who would pay the increase?
A: All those who purchase goods and services in the Village would pay the increase, including those from other areas who shop and dine here. Visitors from outside our area account for more than half of those who pay tax in the Village, just as you do when you shop and dine in other towns. These non-residents use Village infrastructure, and the additional sales tax would allow us to capture revenue from visitors to the community and use that revenue for infrastructure projects that would otherwise be paid for only by our residents (such as the Village’s property tax levy).
Q: How much additional revenue would be generated through the tax?
A: The 1% sales tax increase is expected to generate approximately $1 million per year in additional revenue.
The Village is seeking to replace nearly $500,000 in lost revenue since 2012, from reductions in utility taxes and the loss of the Emergency 911 tax which was taken away by the State. The Village is also seeking to compensate for the doubling of pension contributions in that same time period (from $582,977 to $1,086,371), which results in almost a million-dollar gap in the Village’s position over the last six years. Unlike most private pension plans, a municipality’s contributions to fire and police pension plans and the benefits paid are mandated by Illinois statutes. As a result, we have not been able to keep up with our planned infrastructure improvements as we should.
Q: Why have utility tax revenues fallen?
A: The reduction in landline use (and increasing cellphone-only use) is the primary reason utility taxes have declined. The other revenue that has been lost is the Emergency 911 revenue. The State of Illinois passed legislation to take this revenue source from municipalities, so we no longer receive this revenue.
Q: Why Have Pension Contributions Doubled in this Timeframe?
A. The State of Illinois sets the benefit levels for Public Safety Pension funds, but the Village is mandated to fund the liabilities that are created by the State at those benefit levels. The combination of increased benefits that were granted by the legislature in the 2000’s combined with the poor investment performance in the 2008 – 2010 time period has led to steadily increasing liabilities in the pension funds. In addition, the State has recently changed the actuarial assumptions that are used to calculate the employer contribution amounts, and this caused an additional 25% increase in the amount the Village is mandated to contribute to the pension funds.
Q: Why Are We Using 2012 as the Benchmark Year to Show Revenue Declines?
A. 2012 is the year in which the trends that are negatively impacting the Village’s finances began to materialize fully. Prior to 2012, Telecommunication revenues were relatively stable, the E-911 revenue was fully received, and the pension contribution amounts had increased but were still manageable (i.e., in 2012 the Police Pension Fund contribution was $579,000, now it is $1,355,000, a 134% increase in six years).
Q: If the increase passes, what would the Village do with the additional revenue?
A: The Village would use these dollars for infrastructure needs. Currently, our roads program should be on a 25-year replacement program; however, with current revenues we cannot currently keep pace with this schedule, which covers the entire Village roadway system – 54 lane-miles. (This excludes major roadways such as Route 59, Route 14, and Lake-Cook Road, which are owned and maintained by the state.) These additional dollars would go directly toward putting us on the 25-year repair and replacement schedule.
Q: Why can’t we cover our infrastructure needs with existing revenue and within our existing budget?
A: The Village has maintained strict financial discipline during the turbulent economic events of the past decade by maintaining minimum staffing levels, controlling operating expenses, and continuing to provide services as efficiently as possible.
Historically, the utility tax has been the primary source of funding for our infrastructure program. The Village annually contributes extra dollars from its general operating fund to the road program, but because utility revenues have gone down and pension costs have gone up, we don’t have the dollars to put into our infrastructure program. We must now increase our revenue in order to compensate.
In addition, inflation on construction costs is currently between 6 and 7% annually, adding to the cost burden when road repairs or replacements are put off into the future.
Q: What would the Village do if the increase does not pass?
A: If the increase does not pass, the Village will not be able to continue to adequately fund its road repair and replacement program. If this occurs, we would be in the unfortunate position of having to make a choice between cutting other necessary services to our residents, such as police, fire, or snowplowing services or funding infrastructure projects such as street improvements.
Q: What do other neighboring communities pay in sales tax?
A: Please see the chart below.
(Advisory Question #2)
Should the Village of Barrington provide a preference to Village residents at specific locations in the Village’s commuter parking lots which are used by residents of other communities?
Q: Why is the Village asking this advisory question about priority parking?
A: The Village Board and staff seek input from the community as it considers various commuter parking enhancements and restructuring in the near future. The Village has recently reached an agreement with the First Church of Christ Scientists at 421 E. Main Street to acquire 88 additional parking spaces and is currently planning new ways to maximize the use of the commuter lot.
(Advisory Question #3)
RENEWABLE ENERGY (Advisory Question)
Should the Village of Barrington consider the use of renewable energy sources in any future projects if that does not increase the cost of the project by more than ten percent (10%)?
Q: Why is the Village asking this advisory question about renewable energy?
A: The Village Board and staff seek input on whether residents support the use of renewable energy sources in planning future projects in the Village. As a conservation-minded community, we would like to gauge our residents’ interest in making renewable energy part of future projects.
Q: Is the Village planning future projects?
A: The Village created a modern Public Safety building and Village Hall in 2000. As a part of its future planning, the Village will be reviewing its Public Works and other facilities and their needs in the 21st century.