The $4 million imbalance in Elmhurst’s proposed operating budget is caused by inflation (which increases the cost of goods, services and labor), mandated state programs (such as pension raises for police and fire) and the subprime meltdown (which has triggered our national economic slow down, resulting in lower retail sales tax revenues, an important source of city revenue). As a result, we are forecasting increased expenses and lower revenues and are left to deal with a budget imbalance.