For the second straight year, North Riverside will increase its tax levy, hoping to gain additional revenue from increased property assessments due to new commercial construction in the village during the past year.
The village’s board of trustees is poised to approve a 3.5 percent extension of its tax levy at their Dec. 14 meeting.
Until 2014, the village board had not extended its property tax levy for more than 20 years. Because of the village’s large retail sales base, the vast majority of the village’s income is derived from sales taxes.
During the 2014-15 fiscal year, for example, North Riverside took in about $9.1 million in sales tax revenue, according to the village’s comprehensive financial report for that year. Property tax revenues accounted for just $496,000.
According to North Riverside’s finance director, Sue Scarpiniti, for a residential property valued at $200,000, the village’s portion of the annual tax bill is about $105, or 2.3 percent to the total.
“I wish people would realize how few of their tax dollars go to the village,” said Mayor Hubert Hermanek Jr.
Despite sales tax revenues, which came in slightly above estimates in 2014-15, North Riverside is still struggling to pay for both its day-to-day operational expenses and its police and fire pension obligations.
While the proposed tax levy increase is only predicted to raise about $18,425 more in revenue for the village — and could be adjusted downward due to Illinois’ tax cap laws — Hermanek said it would be irresponsible for North Riverside to continue its prior longstanding policy of freezing its property tax levy.
“The overall health and stability of the village is dependent on this board getting its financial house in order,” Hermanek said at a meeting of the village’s finance board committee on Nov. 11.
Non-home rule municipalities such as North Riverside have a limited ability to raise property taxes annually. The village is limited to raising the tax levy by 5 percent or the percentage increase in the consumer price index (CPI), whichever is less.
For 2015, the CPI is .08 percent. However, the law does not so tightly restrict the village from gaining additional tax revenue from higher property assessments due to new construction.
According to Scarpiniti, it can take up to three years to realize the full equalized assessed value on newly developed property. As a result, the village will ask for a tax levy extension greater than the CPI in order to capture revenue from new construction.
Even with that, the average North Riverside homeowner will only see his tax bill go up about $5. For taxpayers receiving a senior citizen exemption, the increase will be about $3 for the village’s portion.