Lombard trustees may increase the village’s restaurant tax and phase out its taxi subsidy program to help reduce a projected $1.6 million deficit in its 2017 budget.

Officials say talks addressing the deficit — caused mostly by rising costs of non-discretionary expenses such as workers’ compensation and pensions — began last November.

“We saw some of the challenges we were going to face and started tackling them right away,” said Trustee Reid Foltyniewicz, chairman of the finance committee.

Foltyniewicz said the committee didn’t want to introduce a “forced tax” on residents, like a vehicle sticker, and other revenue sources, such as video gambling or an entertainment tax, would be unpopular and not generate the money needed to balance budgets for the next few years.

In March, the committee unanimously recommended the village board double its 1 percent restaurant tax, also known as its “places for eating” tax, to 2 percent. Since then, all the village’s committees have studied the proposal and provided input. Feedback also has been solicited from restaurant owners and other community groups.

Foltyniewicz said one advantage of the restaurant tax is that roughly 65 percent of those who pay it live outside Lombard.

Officials propose putting $800,000 of the money raised by the tax increase into the village’s general fund. The remaining money would be held in reserves that likely will be needed by 2018.

Village Manager Scott Niehaus said Lombard’s restaurant tax would be less than Hanover Park’s 3 percent tax, match Schaumburg’s 2 percent tax, and be slightly more than the 1.5 percent tax in Villa Park and Westmont and 1.25 percent tax in Naperville.

He said other towns may introduce or raise their restaurant taxes, including Geneva and Libertyville.

“I think the common thread (is) ... unfunded mandates, state-required payments,” Niehaus said. “We are not home rule, which means our hotel-motel tax cannot be used for the general fund, our 1 percent sales tax can only be used on infrastructure. So our hands are tied a little bit.”

The village’s 1 percent restaurant tax has been in place since 2003 and last year generated nearly $1.7 million. The increase, if approved, would begin Jan. 1.

“We’re not just raising taxes,” Foltyniewicz said. “We’re going to be eliminating or cutting a whole lot of things within the village.”

That includes selling excess equipment, reducing banners and decorations, freezing hiring for open job positions and eliminating other open positions, among other cuts.

Aside from the tax increase, the board also may phase out its taxi subsidy program. Eligible seniors and people with disabilities currently can purchase $26 worth of taxi coupon vouchers for $5 through the village. Niehaus said the program costs the village roughly $40,000 a year.

Last year, 251 residents took part in the program. About 40 percent of them live in the Beacon Hill and Lexington senior communities.

Only four other DuPage County communities — Downers Grove, Lisle, Villa Park and Westmont — offer a taxi subsidy program.

Board members said they’re concerned about making sure residents still can access the transportation they need, but there are alternative programs offered by the county, townships, Regional Transit Authority and the Illinois Department of Human Services.

“There is a lot of redundancy and overlap,” Foltyniewicz said. “We tried to find the least painful way of doing this.”

If approved, the village will stop selling vouchers Dec. 31, but existing ones will be honored through 2017.

The board will vote on both issues Aug. 18.