Brookfield’s village board on Dec. 10 is poised to pass a tax levy extension request that is 13.7 percent more than last year’s request. But when the dust settles in mid-2019 after Cook County determines equalized assessed value of the village’s properties, the tax increase likely will be closer to 3 percent, said the village’s finance director, Doug Cooper.
“We’re not going to get anywhere close to [the 13 percent levy request],” said Cooper in a phone interview last week. “I just want to make sure we’re not going to miss any of the new growth [in property assessments].”
For comparison, Brookfield in 2017 requested a tax levy extension of about 9 percent. The actual levy extension allowed by Cook County was 3.76 percent. That increase was for the village’s portion of taxes levied against properties in the village. The village accounts for about 22 percent of a Brookfield homeowner’s property tax bill in Lyons Township and about 19 percent in Proviso Township.
Non-home rule municipalities like Brookfield are limited in how they can raise property taxes on an annual basis. State law allows municipalities to extend tax levies by 5 percent or the consumer price index (CPI), whichever is less.
The CPI for 2018 is 2.1 percent. So why is the village asking to extend its levy by 13.7 percent? Part of the reason is the new growth in equalized assessed value of properties in Brookfield.
The value of new development – residential and commercial – can be captured to its full extent, but the municipality needs to extend the levy far enough to do so. If a municipality minimizes new growth, it loses the ability to levy for it.
The trouble for municipal finance directors is that it’s tricky to predict just what that growth will amount to, and municipalities must put in their levy extension requests every December but won’t know the exact EAV until six months later.
Another reason for the large tax levy request has to do with servicing the debt on bonds the village issued starting in 2016 for street improvements after a successful referendum that year.
Debt service levies are uncapped so that municipalities can make good on long-term debt like bond issuances.
The 2018 debt service levy is going up roughly $700,000 – or 64 percent — from $1 million last year to $1.7 million. Taxpayers certainly will see that increase reflected on their tax bills next year.
Apart from debt service, the village is levying $8.8 million to help fund its day-to-day operations, a roughly 7.2 percent increase compared to last year.
Almost $3.2 million of that levy will go to fund the village’s police and fire pension obligations – 36 percent of the total levy for village operations. Another $4.1 million is being levied to fund police and fire protection, leaving just $1.5 million for other village services – including the village manager’s office, finance department, building department, recreation department and public works.
The difference is funded through a variety of sources, including sales taxes, the village’s share of the state income tax, fees, fines and charges for services.