March 23, 2006

EDITORIAL

Public involvement key to budget

Village Manager Eric Swansen, who has been on the job for a little more than two months, delivered a dose of sobering news over the last four weeks when he presented the 2006 Village budget, which includes deficits in four major funds, and laid out a plan of cuts, belt-tightening and a tax increase to address what he described as a “significant concern.”

As Mr. Swansen and Village Council members know, it is crucial to develop an effective mechanism to engage and educate the public about the budget situation and possible solutions that could fix the deficits and put the Village on better financial footing. The key will be not to drag politics into this effort, but instead to address the situation for what it is: a community challenge that community members must understand and participate in.

As the 2006 budget shows, four of the Village’s main funds — electric, sewer, water and the general fund — are projected to incur deficits because expenses, including capital items, are expected to be greater than revenue. Because of this, the Village is using year-end reserves to maintain some operations and to complete a number of necessary capital projects. Swansen is concerned that revenue will not rebound and the Village will be forced to keep spending down the reserves.

The problem is that the Village’s operational costs have continued to rise while revenues continue to be insufficient to pay for operations and a mountain of capital improvements. Mr. Swansen said that the Village has deferred many capital projects that “can’t wait any longer,” and that more projects are out there.

In an interview last week with the News, Mr. Swansen introduced a proposal to ask Council to place on the November 2006 ballot a property tax levy. The levy would pay for daily operations in the general fund and fund capital improvements for the Village utilities, streets and activities in the general fund. Mr. Swansen said that the Village should seek a levy that generates enough revenue to cover the government’s operations for at least 10 years.

At the same time, Swansen said, the Village will try to reduce costs by offering early retirement to Village employees “across the staff.” This could certainly be difficult, but if done sensitively and smartly, it could make a difference with the Village books. The Village also plans to increase user fees and cut overhead costs.

Council member Judith Hempfling is right when she says that the Village has a real problem, and it’s not just Council’s problem, it’s the community’s problem. She also urged the community to get involved in the Village’s budgeting process, calling it “extremely important” that the public understand what the Village is facing and to offer solutions. But Council member Bruce Rickenbach also was right when he said that previous Councils have tried to engage the public, but “people aren’t listening.”

Engaging the public about financial issues is always going to be a challenge since most people don’t have time to read budget reports. The one thing that is likely to get local residents’ attention is a proposal to raise taxes. Council and Mr. Swansen must find a method to help busy local residents comprehend the Village’s budget problem so that villagers can be active participants.

—Robert Mihalek