GENEVA – To avert the need for further operational spending cuts in 2014, Kane County’s government could opt to reduce the amount it collects from taxpayers for employee pensions and its liability insurance costs.
However, that could set up less predictable budgeting in coming years, the county’s chief financial officer told the Kane County Board.
As the Kane County Board prepares to put the finishing touches on the county’s 2014 budget, it will consider a recommendation from county CFO Joe Onzick to reduce two special property tax levies.
Onzick recommended the County Board reduce its so-called Illinois Municipal Retirement Fund levy by $319,000, and its tort judgments and liability insurance levy by $415,000.
However, the reductions would not reduce the amount taxpayers owe.
Rather, the saving from those two levies would be used to offset an increase in the county’s general corporate levy, a property tax amount that the county is allowed to use to pay for day-to-day operations at its various departments and offices, such as the county’s transportation, public health and development departments.
Onzick said the county will not be transferring money collected through the IMRF and liability insurance levies to the general fund, as that would violate the law.
Rather, the reductions in the other levies would allow the county to increase the general corporate property tax levy without increasing the total tax levy charged by the county government to taxpayers.
Onzick said the alternative to his proposal would be to find places within the county departments to cut spending.
When the levy proposal first was publicly discussed at a County Board meeting late last month, some County Board members questioned whether the proposal would leave the county unable to pay its full share into employee pension funds, or risk leaving the county overexposed to lawsuits.
On Wednesday, Onzick said those fears are unfounded.
Speaking to the Kane County Board’s Executive Committee, which includes the chairmen of every County Board committee, Onzick said he is merely proposing reducing those other two levies to the amounts the county actually needs to meet its obligations in 2014.
He said the county would make its full pension payments in 2014. And he said 24 percent of each regular pension payment is already dedicated toward paying down the county’s “unfunded pension liability.”
“People misunderstood that the county was deciding not to pay down its unfunded pension liability,” Onzick said. “That would not be true.”
Further, Onzick noted that the IMRF fund currently carries a balance of more than $6 million that has accumulated through the years, and the liability insurance fund carries a balance of about $5 million. Those amounts cannot be used for any other purposes.
While acknowledging the clarification Wednesday, some County Board members questioned whether reducing the pension levy was advisable, and whether reducing the levies to only what is required for 2014 would compel the county to increase those levies in coming years to meet new obligations.
Onzick agreed that the levies would need to increase in coming years.
“At that point, it will challenge the general fund to find new revenue sources or find places to cut,” Onzick said.
The County Board is expected to again discuss the budget at its full board meeting Tuesday.