Tuesday, July 29, 2008

When you scale back a rebate, you are raising taxes

Orland Park officials are very creative. They've done a great job in spinning the budget deficit of $4.8 million, according to news reports this past week. It is really amazing. What's more amazing is residents of Orland Park don't care that they are going to pay more in taxes, even though village officials are saying they are not raising taxes.

Let me give you a civis lesson in municipal budgets.

When you collect a tax and then give it back. It is called a rebate. When you rescind all or part of a tax rebate, you are raising taxes.

In otherwords, you can't have it both ways and claim you are doing the taxpayers a favor by rebating the village portion of their property taxes, and then claim you are doing the taxpayers a favor when you say you will scale back the rebate by as much as 1/3.

The headlines of the news stories about the issue are hysterical, especially if you don't care about the rising taxes in Orland Park.

The Orland Park Prairie, my favorite local newspaper, wrote:

At a budget meeting held Thursday, July 24, the revised, balanced budget was presented to the board with village services left fully intact."We've balanced our general fund budget by making cuts, none of which will affect the services the village offers," Finance Director AnnMarie Mampe said.

Village services left intact. Maybe I read that wrong. Fees are going up. Some recreation programs are being shuffled around and trimmed. The Village Portion Property Tax Rebate that Mayor McLaughlin and the board have touted as proof that they are the best leaders in the Southwest Subrubs is being curtailed DRAMATICALLY. It really amounts to a significant increase in your property taxes, because, well, THE BOTTOM LINE IS YOU ARE GOING TO BE PAYING MORE.

But then, maybe you don't care. Chances are your home hasn't been foreclosed on by the bank so you have lots of money to spare. Or maybe, you are one of the mayor's chums and are doing pretty well with that connection.

This is what the Southtown/Star wrote:

Orland Park has found a way to make up for a $4.8 million budget shortfall in its operating budget without cutting village services or raising taxes. The village's annual practice of rebating local property taxes also is safe, but the formula likely will change.

I know the sigh of relief that we're going to get our village property taxes rebated is overwhelming. Well, it will remain "intact."

Well, not really "intact," though.

Later in the story, the reporter wrote:

The board is proposing to change the way it rebates residents' property taxes, Mampe said.
The change would provide more money for the village's capital improvements, Mampe said.
Under the existing formula, if a taxpayer pays $200 in property taxes to the village of Orland Park, then the village uses what it collects in home rule sales taxes to rebate the entire $200. The rebated amount includes what is levied for pensions.
Under the proposal, the taxpayer who pays $200 in property taxes to the village would receive $133 back, and the remaining $67 - the amount levied for pensions - would go toward capital improvements.

Can you say SHELL GAME.

Ah. I paid $200 in taxes and used to get it all rebated. Now, under the rebate plan that the media reports isn't really changing, I'm only going to get $133 back and the remainder will go to fund the pensions of, well, the people who are making the decisions in the village. Not you, the taxpayer, the circus people at Village Hall.

So, they have split up the village property taxes into two parts. One if the actual property tax, and the other is the property tax (that goes to fund the pensions.)


There is no question in my mind that McLaughlin really understands creative financing.

I want to keep paying my "Water Bill" but since the Water Bill doesn't just include water, but also garbage removal and a hefty tax increase in village fees for the administration of that bill, I will just deduct the 60 percent of the "Water Bill" that isn't really the "Water Bill" and, according to village logic, valla! I will have restructed the Water Bill payment, keeping it "intact." I just won't pay it.

I don't think McLauglin would go for that at all.

Shell Game. It's a new program the village is going to offer as a part of its Winter programs to keep their salaries (and raises) "intact."

Ray Hanania

1 comment:

Bob said...

Does the budget show what the Village has proposed for compensation increases - both salary and benefits?

On a side note - do you know what the village employees receive as pension benefits?