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Revenue shortfalls make DuPage cautious
By Jake Griffin | Daily Herald Staff
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Published: 6/24/2009 12:02 AM

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Revenues that fell 30 percent below projections last month has DuPage County readjusting its budget and putting the brakes on plans to borrow for capital improvement projects.

May revenues came in at $9.2 million, finance department officials announced during a quarterly budget update at Tuesday's county board meeting. Sales tax revenue was off by $1.5 million, and fees from the recorder's office were off by $1.9 million. Delays in state reimbursements also accounted for the revenue decline.

Fred Backfield, the county chief financial officer, has lowered revenue projections for the year by $5.6 million. The county will be able to make that up by putting off plans to borrow for a massive capital improvement campaign.

"The initial analyses do raise caution flags and emphasize that the key in next year's budget will be controlling competing costs and pressures," he said.

Those "competing costs and pressures" are mainly related to personnel costs. Despite a full-time employee head count for the first six months that wound up about 75 workers below what was budgeted, health insurance costs were up by $613,000 in the first six months of the year.

"It's obviously a significant figure, and every year health insurance is a concern," said DuPage County Board Chairman Robert Schillerstrom. "And there are some pretty strong indicators health insurance is going to cost more next year."

Schillerstrom said there's no need to institute a hiring freeze, but some board members are keeping an eye on personnel costs.

"As attrition occurs, more often than not we're not replacing those positions," said board member Paul Fichtner who heads the board's finance committee.

Some board members also said the county's finance department should have been more conservative with revenue estimates to begin with instead of pushing spending plans for majority of the sales tax increase generated by a quarter percent hike last year.

"Generally, government finance offices are never conservative enough," said board member Brien Sheahan. "Thank God we won the fight over forecast of revenues this year that were 6 percent higher when the process started."

Schillerstrom said he was not alarmed by the midyear figures.

"We have a rainy-day fund and our cash balance is where it should be," he said. "We're in a very good position compared to all the other counties. I wouldn't trade places with any other governmental entity."