For the past several years I’ve been sending up flares about the pending arrival of several million dollars in added property taxes being spun out of the four new downtown Oak Park highrises.
Love them, hate them, doesn’t matter. Vantage, The Emerson, Albion and Eleven33 are going to produce an additional $3 million-plus in local property taxes. Every year. Some estimate it will be closer to $4 million when the buildings hit full occupancy.
New development on Madison Street including townhouses, a coming Pete’s grocery store, new assisted living for seniors, will also boost the village’s tax base.
Couple the new development with the imminent end of Oak Park’s two largest tax increment financing (TIF) districts – greater downtown Oak Park and Madison Street – and the moment of truth for Oak Park taxing bodies is upon us.
Before the end of the year every taxing body will approve a new tax levy, which sets the pot of money they seek to collect next year from local taxpayers.
Property tax hikes for non-home rule agencies, like school districts and park districts, under state tax caps are limited by the rate of inflation or 5 percent, whichever is less. But there are exceptions. Top among the exceptions is the ability of taxing bodies to tax the value of new growth coming into the village and to recoup dollars which over decades have been funneled into the village government controlled TIF buckets.
Put these two revenue streams into play and there is a lot of money — millions of dollars – available.
It is a notable number. Maybe not a game-changer for the rest of local taxpayers who pine for their taxes to drop. That’s not likely to happen. But this new money can help mitigate additional, unsustainable tax hikes if local taxing bodies don’t just absorb the new money into their free-spending veins.
That’s the warning I’ve issued multiple times.
Right now is tax levy season.
The library levy has already gone to the village board, which for odd, historical reasons tacks the library levy onto its own.
So we know the library is asking for its traditional 3 percent hike but is also adding on almost $700,000 which previously had been diverted into the TIF fund.
Oak Park and River Forest High School is just out with its recommendation to the school board that it raise taxes under CPI by the 1.9 percent allowable this year. In addition, it adds all the equalized assessed valuation of property till now in the TIF and new growth (high rises and other new projects).
If approved by the full board on Nov. 21 it will reflect a levy increase of 7.75 percent and compute out to a $5 million increase in property taxes collected.
Still waiting to hear from the other taxing bodies on their plans for levy increases.
Both the library and OPRF are arguing that they need to claim this new property this year or potentially forego including it in subsequent years. I get that. Makes sense that after all the years of seeing tax dollars diverted into the TIF that every taxing body would want to benefit from the hard-won successes of the development work.
That said, claiming the new property does not necessitate taxing to the max. Ask for less total dollars and individual tax bills at least don’t rise as much.
The argument made, so far, by both OPRF and the library that they are only taxing the same amount as the village diverted into the TIFs is weak tea. They are not obligated to continue that level of taxing.
While taxing bodies have the right to benefit from an expanding tax base, so do taxpayers. That was the whole point of the TIFs, the major point of the highrises.
In its presentation to the board, OPRF administrators argue that boosting revenues by $5 million a year will allow it to forestall the next tax referendum.
There’s a reason for tax referendums and it is to give taxpayers a say in how much money they shell out. Delaying that opportunity by taxing to the max right now is not the goal.