The village of Riverside will present it 2024 budget tonight, a blueprint partially informed by Riverside’s annual five-year financial forecast.
Generally, these financial projections show Riverside is likely to see an annual surplus in the village’s general fund. The surplus amount could gradually increase from tens of thousands to hundreds of thousands of dollars. For 2023, the village expects to keep about $82,000 after all expenses. By 2026, this amount is likely to increase to $671,000.
Cannabis and sales taxes may increase village’s income while property tax income will likely stay flat
The five-year forecast shows the village expects sales taxes to substantially increase, mostly because of the recently opened cannabis dispensary Starbuds and the Sherwin Williams store. Conservative village estimates show that the sales tax revenue will increase by $200,000, although the sum could be greater if sales are higher than projected. It is estimated sales tax revenue will near $670,000 in 2024 and it could surpass $700,000 by 2028. In 2020 alone, the village collected about $220,000 in sales tax.
Cannabis sales will likely also increase per capita taxes for the village because it will receive 3% of all cannabis sales. An increase in the village’s population, shown by the 2020 census, also increases the per capita taxes it receives from the state, which also include state sales and use taxes. However, these amounts could vary if the state determines changes to the percentage of per capita taxes it distributes to villages and municipalities.
Consistent with prior years, most of the village’s general revenue comes from property taxes. In 2022, these represented about 38% of all income in the village’s general fund. It is expected this revenue will be stable; however, it will not increase because property taxes cannot be increased above 5% in non-home rule communities like Riverside according to state law.
Historically, the village has increased property taxes based on the annual increase in the national Consumer Price Index. On average, these increases have been between 2% to 3%.
This impacts the village’s ability to stay par with the recommended contributions to the village’s police pension fund by using property tax funds. For 2023, the recommended contribution is about $1.6 million, about $330,000 above the required contribution.
Other sources of revenue that will see very modest increases, ranging between 2% to 3%, include construction-related fees, recreation program fees and vehicle registration fees.