The Oak Park village board may eliminate the 3% cap that has served as the threshold by which the village bases its annual property tax levy extension. The numeric figure is planned be replaced with language that directs the board to limit the tax levy increase based on financial policy, developed by the village’s finance committee, and to be reevaluated yearly.
The village board has yet to officially amend the goal and won’t do so until it returns from its August break, but it is unlikely the board will change its mind regarding the tax levy.
An informal vote taken during the board’s July 17 goal-setting session indicated that all board members were fine with parting ways with the 3% number, save Trustee Ravi Parakkat, who said having a designated limit provides immediate accountability, rather than a vague promise to try to keep the levy low.
“We do need a number and 3% seems like a reasonable number to benchmark against, knowing that it’ll probably be a little different each year depending on the realities of the year,” said Parakkat, who also serves on the finance committee.
Parakkat’s disinclination set the stage for something of a philosophical debate on policy versus practice, with Village President Vicki Scaman contending policy creates long-term accountability, without restricting the board in the face of future unknown economic factors.
Deferring to the finance committee allows its members to create a formula by which to determine what budgetary limitations exist each year, according to Scaman.
“We don’t want to be setting ourselves up for failure or limiting even what it is that we can attain,” said Scaman.
Committing to increasing the village’s property tax levy by no more than 3% has become standard practice over the last several election cycles, holding a seemingly permanent spot on the board’s list of goals, the roadmap guiding what the elected officials plan to achieve in a designated two-year span.
The 3% number is recognizable to Oak Park property owners and its preservation a promise upon which board members campaigned, said Parakkat. Removing it could result in ballooned government spending accompanied by higher property tax bills – going directly against the board’s goal of making Oak Park a more affordable place in which to live.
That argument did not dissuade Scaman, who believes a policy is more “binding, thoughtful and specific” than a goal.
“We have a finance policy that suggests what we leave in reserve, what percentage that is,” she said, adding that the village’s chief financial officer had previously suggested the board update the village financial policy anyway.
“It’s an opportunity to add language so that it solidifies how we would aim to create policy.”
Trustee Cory Wesley, who also serves on the finance committee, sought to find some compromise by suggesting that the board include language within the goals the limit the tax levy to an increase of no more than 3% or the rate of consumer price index, which measures the rate of inflation.
Ultimately, his main concern was formally acknowledging that tax levy should be tied to the consumer price index. He wished to have that made known in the goals, but relented, allowing it to be included in the financial policy.
The board will have to amend the financial policy to incorporate tax levy language and grant the finance committee authority to determine increases. That amendment will include the direction to the finance committee to review the policy every year, a suggestion made by the board’s contracted goal session facilitator, Hilary Shine, of Strategic Government Resources. The board goals are active for two years, offering a little consistency over two fiscal periods.
The board was able to keep the tax levy flat this year due to different economic factors, including an influx of federal COVID-19 relief funds. The finance committee will meet in September to discuss any increase in the village’s property tax levy for next year, with village board budget discussions taking place this fall. The budget is adopted in December.