Village faces budget crisis amid rising inflation and staffing woes

During a recent village government meeting, officials addressed the pressing issue of budgetary constraints exacerbated by rising inflation and a competitive labor market. Over the past five years, inflation has significantly impacted expenditures, prompting a proposal to increase the budgeted expenditure growth rate from the historically projected 2% to 4% for the 2025 budget. This adjustment reflects the current economic climate, where a projected 4% increase in expenditures could lead to a substantial deficit of $700,000 if the property tax levy remains capped at 2%.

The discussion highlighted the critical need for a strategic approach to managing both financial resources and human capital. Officials emphasized that the village is facing challenges in staff capacity, which has been compounded by a shift in the labor market since 2020. With increased workloads and fewer resources, retaining quality staff has become a priority. The village must consider not only the financial implications of projects but also the human resource costs associated with them.

To address these challenges, officials suggested exploring the possibility of raising the property tax levy by up to 8%, which could provide necessary funding for both operating and capital budgets. They underscored the importance of aligning salaries with market levels to ensure competitive employee retention, noting that many current salaries, including those for director-level positions, fall short.

As the village navigates this unprecedented financial landscape, officials acknowledged the absence of a clear plan or playbook, urging a collaborative approach to prioritize core services and values. They recognized the need for careful triage in budgeting, particularly for essential public services and infrastructure projects that require immediate attention.

The meeting concluded with a call for innovative solutions beyond traditional budget adjustments, as officials prepare to tackle the complexities of the upcoming fiscal year amidst ongoing economic challenges.