By Bob Uphues
For the second straight year, the village of Riverside will levy more in property taxes to fund general operations, with the amount it's required to levy for police pension obligations beginning – at least for now – to flatten out after years of large increases.
The Riverside Village Board on Nov. 7 held a public hearing on its proposed 2019 tax levy, which is an annual formal request by the village to increase local property taxes. The village has proposed levying $5,070,434 to fund general village operations, an increase of 4.96 percent over last year's levy approved by the county.
However, it's unlikely that the village will receive the entire amount it will ask for, because of state tax cap laws that limit non-home rule municipalities, like Riverside, to annual increases of 5 percent or the level of the Consumer Price Index (CPI), whichever is less.
For 2019, the CPI is 1.9 percent. Riverside, like most taxing bodies, ask for more than that amount in order to capture any increased assessed value due to new construction. Even with that added value, however, the Cook County Tax Extension Office is likely to approve a final levy closer to 2 percent.
The total value of new construction won't be known until mid-2020.
For example, last year the village's tax levy request was for $4,937,921, a 5-percent increase over the amount the village was allowed to levy in 2017. Cook County allowed the village for the 2018 tax year to levy $4,830,963, about 3 percent more than 2017.
The CPI in 2018 was 2.1 percent, demonstrating the effect tax caps have on annual tax levy requests.
One thing clearly illustrated by the tax levy request is the extent to which property taxes collected by the village annually fall short of funding village operations. The village's proposed 2020 operating budget calls for almost $9.9 million in total expenditures, far short of the amount it levies.
The village covers the difference by imposing fees for things like building permits, sewer fees, ambulance fees and fines.
The 2019 tax levy is asking for $965,415 to fund "corporate" operations, which are expenses outside of public safety, police pensions and certain public works and parks operations.
It's the second straight year the village has sought to increase its corporate levy after seeing that levy drop from $1.2 million in 2014 to $675,000 in 2017.
One of the reasons for that growth is what appears to be a slowdown in the growth of the village's annual police pension contribution.
Between 2014 and 2018, the village's annual police pension obligation rose from $695,000 to $1.38 million. In order to fund pensions at that level, the Cook County Tax Extension Office will peel tax dollars away from other line items as it applies tax caps to the village's tax levy.
In Riverside's 2019 tax levy, the village's pension obligation is rising 3 percent. But as a total percentage of the tax levy, pensions account for the same amount as last year – 28 percent.
"I think what we're seeing is that some of our pension assumptions in the past were more aggressive," said Village Manager Jessica Frances. "We're at the point now where we're seeing incremental increases."
However, Frances warned that that the village's police pension obligations are a "moving target."
"If, all of a sudden, we see retirements or disabilities that can increase what we're going to have to contribute," Frances said.
The village board is expected to approve the 2019 tax levy request at its meeting on Dec. 5. The board at the same time will also vote to approve the Riverside Public Library's tax levy request, which is $1,138,592.
That represents an increase over last year's tax levy of 1.88 percent.