For years, North Riverside officials have contended that raising the village’s tax levy was pointless.
They pointed to the village’s cut of property tax revenue, which amounts each year to a little less than $500,000 per year. Tax caps would allow the village to raise $5,000, maybe $7,000 depending on the consumer price index, in any given year, officials would argue. So, in a situation where the operating deficit is projected to be almost $2 million, what’s the point. A couple of grand is chump change.
Except now that North Riverside is scrambling for cash, the story’s a bit different.
It’s not because the CPI — tax levies are capped at 5 percent or the CPI, whichever is less — has suddenly jumped up. CPI for the 2014 tax levy is just 1.5 percent.
And yet the village is predicting that it can extend its tax levy now and gain an additional $22,000 in revenue — three to four times what they said they’d be able to get in the past.
The reason for the sudden jump is all of the new construction going on in the commercial district. There’s a new Costco and three of the four outlots near Costco have either been developed or are under construction. All of that new development will add to the village’s total equalized assessed value, and because it’s new construction, it’s not governed by tax caps.
That’s the reason North Riverside is proposing a tax levy increase of 4.5 percent, to make sure they recoup the tax value of that new development.
It’s the responsible thing to do. It should have been done for each of the last 25 years; but it wasn’t.
The reason North Riverside is in its present financial situation is because village government wanted to be all things to all people.
Want your water bill subsidized? Sure. Want the village to subsidize trash hauling? No problem. Vehicle stickers? The village will pick up the tab. Lifetime health insurance for all retired village employees? We’d be happy to.
Sales taxes were the unquestioned pot of gold; the solution to all problems. No one likes a tax increase, so we just won’t raise taxes. For any reason.
Think of the value of all the new commercial development in North Riverside in the past 25 years. Heck, let’s just look at the last few years: CVS, H.H. Gregg, Best Buy, Joe Rizza Lincoln-Mercury, Castle Buick, Chick-fil-A, Chili’s, Tony’s Finer Foods. There are more.
All of that tax value lost, forever.
Recently, the village estimated that the average homeowners’ property tax contribution to the operation of village government was $99 per year.
The village used to point to that figure with pride. Now village residents are getting a sense of what $99 actually buys.
Don’t get us wrong. The village is making the right decision by raising the tax levy. It needs to do so in the future. But when explaining why the village is in the situation is in, let’s point in the right direction.
North Riverside gambled solely on sales taxes and came up deuces.