For the first time since the state’s property tax cap laws went into effect in the early 1980s, local governments’ abilities to extend their tax levies to the annual increase in the consumer price index will be limited to 5%.

The Property Tax Extension Limitation Law (or PTELL) caps annual property tax levies for non-home rule units of government, like the villages of Riverside, Brookfield and North Riverside, to the CPI or 5%, whichever is less.

In the past decade or more, the CPI has rarely risen above 2 or 3%. In 2022, the CPI stands at a 7% hike. As a result, municipalities will be limited to a property tax levy extension of 5%, although they can ask for a higher figure in order to also capture the tax value of new construction, which is uncapped in its first year.

Tax caps are in effect for funds levied to pay for general municipal operations, but other aspects of the tax levy are uncapped, such as those for debt service.

Riverside trustees on Dec. 1 approved extending the village’s property tax levy for its capped funds by 8.68% for a total capped levy amount of $5,976,306.

Most, if not all of the tax increase requested for the capped funds is being directed in Riverside to police protection, where the requested levy is going from $850,000 in 2021 to $1.45 million in 2022.

The 2023 budget, also passed by Riverside trustees on Dec. 1, includes a line item to create two more patrol officer positions and fill one vacancy.

Another $1,468,495 is being levied to pay police pension obligations, resulting in nearly half of Riverside capped levy extension going toward police operations and pensions.

The village is also requesting $125,000 to fund its special recreation services – an uncapped levy – as well as about $1 million to fund debt service. The total 2022 village tax levy request is about $7.1 million.

It is likely that Riverside will not receive the full amount of the requested levy and the final increase won’t be known until sometime next year when 2022 taxes are collected. The Cook County Clerk typically sets tax rates in the summer. 

Delays in sending out second installment tax bills meant the clerk’s office didn’t release tax rates for 2021 taxes collected in 2022 until early December. Those delays also left local municipal administrators scrambling to guess just what their 2021 tax levy extensions amounted to, resulting in some local governments levying more than they normally would, knowing Cook County would limit those increases to comply with tax cap laws.

Brookfield trustees approve 6% levy hike

At their final meeting of 2022, Brookfield village trustees voted to request a 6% increase in their tax levy for capped funds such as police and fire protection, police and fire pensions and day-to-day village operations.

The village hopes to collect about $536,700 more next year in property taxes than it requested in 2021 for this year. Essentially all of that increase will go toward increased police and fire protection funding.

Police and fire operations coupled with police and fire pensions amount to $7.8 million or roughly 82% of the village’s total tax levy request for capped funds of about $9.5 million.

Because the village is levying slightly less in 2022 for debt service, the total tax levy extension request amounts to an increase of 4.5% year over year.

North Riverside seeks levy extension of 5% 

For the second straight year, North Riverside village trustees on Dec. 12 approved asking for an increase in its property tax levy.

Trustees voted 5-1 to extend the 2022 property tax levy by 5%, which would result in a total revenue increase of $606,743 compared to the $577,850 it asked for in 2021. Trustee Marybelle Mandel voted against the levy increase.

North Riverside property tax revenues are so low because for two decades the village board did not request property tax levy extensions, relying instead on sales taxes to fund village operations.

That model has grown increasingly unsustainable and in recent years, elected officials have voted occasionally to increase taxes. Police and fire pension obligations, which North Riverside village boards underfunded for years instead of opting to increase property taxes, have grown to about $4.2 million annually and the village’s 2022-23 budget calls for general operating expenditures of about $22 million.

Combined local tax revenues – property, sales, video gambling, intergovernmental and miscellaneous taxes — in 2022-23 are projected to be about $14.4 million.

The owner of an average home in North Riverside pays about $125 to the village annually in property taxes. The lion’s share of local property taxes in all municipalities goes toward school districts.