Waukegan officials are looking at the city’s fourth consecutive balanced budget without a property tax increase and its first without reliance on the $19.7 million of federal COVID-19 relief funds it received in 2021.
Interim Finance Director Don Schultz introduced the approximate $245 million budget during a public hearing Monday at City Hall after months of planning by Mayor Ann Taylor, city department heads, and other staff.
The Waukegan City Council is scheduled to vote on the budget and salary ordinance for the fiscal year starting May 1 at 7 p.m. Monday at City Hall creating a spending plan for the coming year.
With planned expenses of slightly more than $245 million against projected revenue — approximately half from property taxes — of close to $238.4 million, Schultz said the balance will come from approximately $6.6 million of a $54.9 million cash reserve.
Representing an 11.9% increase over the current fiscal year ending April 30 when the city spent approximately $218.7 million, there will be just under $26.3 million more spent, according to the budget.
Approximately half the city’s anticipated revenue of $234.8 million will come from projected real estate and other taxes of $119.3 million of which $37.2 million are property taxes, according to the budget.
This is the fourth straight year the city has kept its property tax levy flat. Former Mayor Sam Cunningham pushed not to increase property taxes four years ago and Taylor pledged to do the same since. The City Council has continued to not raise taxes.
Between local and the city’s share of state sales tax, there will be $26.4 million realized and $13.9 million from income tax distributed by the state, according to the budget. Shultz said the casino added $3.6 million last year and will do more with a full year of operation in the coming fiscal year.
With the city’s share of sales taxes increasing, Schultz said the rate did not go up. Business improved as people bought more goods in Waukegan’s stores adding to the revenue stream.
“This is not because of inflation,” Schultz said. “A lot of mom and pop shops are doing well.”
Other major revenue sources include interest of $18.6 million, approximately $17.5 million from federal, state, and county government as well as $16.8 million from water and sewer sales.
Nearly half the planned spending will be for salaries and benefits to city workers of approximately $120 million. Contract services to outside vendors who provide benefits to the city account for just under $69.7 million.
Of the money being spent for city personnel, a significant amount — 42% — goes to police officers and firefighters as well as contributing to their pensions. A strong segment also goes to public works.
“What we do is provide services,” Schultz said. “We don’t make anything. It’s the people who provide the services.”
With two more police officers scheduled to be hired next year, Schultz said the force will have 165 sworn officers and three new firefighters through a grant.
A significant increase in spending this year will be an additional $9 million for capital expenditures for items like roads, bridges and culverts. Schultz said approximately $39.4 million is budgeted for the coming year with approximately a third going to streets.
Another goal of the budgeting process is sustainability. Schultz said he and his staff look beyond the current year and the following one when developing a financial plan. The future must be considered.
“The other major objective is to create a financial plan that’s sustainable,” Schultz said. “It’s one thing to prepare a budget that’s good and balanced for one year. What we look for is a budget that can be balanced for next year and four years thereafter.”
