The most recent news out of the Village of Schaumburg and already a bad budget situation has gotten much worse. This from the last FLAGG Meeting on July 20th.

Trustee Curcio asked about the budget deficit and what was in store for the future? Mr. Ellsworth stated that the original deficit was expected to be $3.2 million but based on the current revenue projections, staff is estimating a budget deficit of $6.5 million for the current fiscal year. Mr. Ellsworth stated that fund reserves are getting low and decisions will have to be made on how to deal with the deficit.

Trustee Dunham asked if the Village’s bond rating could be reduced if the fund reserves get to low? Mr. Ellsworth stated that is a possibility.

The good news is that there is no shortage of ideas from the Schaumburg Freedom Coalition on not only how to get the budget deficit under control, but even provide tax relief for the people of Schaumburg. Over the next few weeks the Schaumburg Freedom Coalition will be rolling out over 40  cost savings ideas for the Village of Schaumburg government. All without touching standard Village services of roads, police, fire, and core public works projects.

We will propose our cost savings tips in chronological order, with line items from the Village Board Meeting Agenda’s starting from January 1st, 2008.  Below is our first cost savings tip:

SFC’s Cost Savings Tip #1

Stop all plans for a second $80 million dollar Schaumburg Performing Arts Center, currently planned to be built in a vacant lot next to the Schaumburg Convention Center. Close the Performing Arts Center Fund, sell the vacant land, and redirect annual contributions from State of Illinois Income Tax sharing, and other funds, back to general fund.

First a little background on the Performing Arts Center Fund.

The Performing Arts Center Fund is an account for the financial resources to be used for the construction of a 2,400-seat performing arts center to be built in future years on the property adjacent to the Schaumburg Hotel and Convention Center. Financing is provided currently by a percentage of intergovernmental revenues, transfers from other funds, and interest income. From the 2008 Schaumburg Comprehensive Annual Financial Report.

At the February 12, 2008 Village Board Meeting, the Board voted unanimously voted to take 2.2% of State Income Tax Revenue and transfer it into the Performing Arts Center Fund. The Village’s share of the State Income Tax in 2008 was $6,918,730, 2.2% of that is $152,212.06. The Village has also made other transfers into the Performing Arts Center Fund over the last few years.

Schaumburg already has the Prairie Center for the Arts, there is no need to force taxpayers to pay for a second Arts Center. If the people of Schaumburg and surrounding communities truly demand a Broadway type of theater there is no reason the private marketplace cannot provide for it.

If no entrepreneur can profitably undertake such a large project without taxpayer subsidy, it is a strong indication the public doesn’t want to build it, at least not with thier own money. Inadequate market demand for such a grand theater project shows that people prefer to spend their money on other more pressing needs such as housing, health care, education, etc.

Currently, the only foreseeable way I see this project comes to realization is through massive government (taxpayer) subsidies from the Village of Schaumburg. Otherwise it is just a pipe dream of local politicians who want to force the taxpayers to subsidize their own selfish desires.

SFC Recommendation

Overturn the February 12, 2008 consent agenda ordinance directing Village staff to deposit the additional 2.2% of state income tax revenue in the Performing Arts Center Fund, redirect back to general fund. In fiscal year 2008, 2.2% of State Income Tax Revenue (State Income Tax $6,918,730) was $152,212.06.

Liquidate the Performing Arts Center Fund and sell land currently reserved for Performing Arts Center to highest bidder.

Savings for Schaumburg Taxpayers

• $1.2 million (fund total as of April 30, 2008) one time transfer from the current Performing Arts Center Fund to the General Fund.
• $2-$3 million one time windfall from sale of vacant land.
• $250k- $500k  potential annual property tax relief for other Schaumburg taxpayers through removal of special property tax exemptions.
• $152,212.06 annual savings from removal of 2.2% state income tax revenue transfer.

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