The Oak Park village government’s 2027 proposed budget has been issued and it includes a whopping 7.94% hike in the village’s percentage of local property taxes.
The staff proposal is based on goals set by the village board. The board and its finance committee will now host a series of public meetings to review and possibly adjust the draft. The full board will adopt a final budget in December.
The village levies property taxes to fund the operating budget, debt service, and police and fire pensions. Simply speaking, it is the amount of revenue the village needs to collect from property owners in order to fund its annual budget, this year valued just over $43 million in property taxes. The village has additional sources of tax and fee revenues.
The proposed 2027 general fund expenditures, including one-time and reoccurring expenses, is about $86.3 million.
The upcoming year marks an “inflection point” for the village, said Chief Financial Officer Kevin Bueso. He also said transparency to residents on financial budgeting is important.
“That’s key for us to communicate on the levy and to make sure that there is that sort of information added as context as to why the levy is increasing to this level.” said Bueso. “So the levy, as is what we’re recommending at this time, is in order for us to deliver the level of service that the village board is asking us to deliver, this is what this is the funding level that we need to get to that point.”
“It’s all about aligning with the village board goals.”
President Vicki Scaman said she welcomes community engagement at the finance committee meetings and village board table as difficult conversations are going to be had, and even more difficult decisions have to be made.
“We have long said that we anticipated very, very challenging conversations in the future, and that’s not going to stop. We work diligently to make the best decisions that we can,” said Scaman.
Trustee James Taglia shared his reservations on the steep increase to the levy and said he wants to look at ways to reduce it in upcoming discussions.
“Oak Park has a big heart, but that comes with a big expense,” said Taglia. “I don’t think anyone wants to cut any services, but I do think that there are ways we can economize. There are ways we can prioritize differently, and we should consider that.”
“We’re going to try to do what we can to help taxpayers, and that’s our job.”
Bueso and Village Manager Kevin Jackson said there are multiple driving factors behind the proposed increase to the tax levy such as the commitment to fully funding fire and police pensions by 2040, the end of pandemic era American Rescue Plan Act funds, and a need to continue funding larger capital improvement project initiatives.
The end to pandemic relief revenues means the village has to structurally integrate the programs those dollars paid for into the general fund operating expenses. This includes two public health roles and three alternative police response positions in the E.C.H.O program.
The village board had also previously directed about $2.7 million from the general fund reserves to be allocated towards sustainability, including salaries, benefits and grants. This proposed budget aims to add the salaries and benefits of sustainability staff to the general fund to open up all of the reserved funding for grants.
There is also an increased investment for modern technology and the IT Strategic Plan to help with efficiency and village staff’s ability to do more in-house rather than paying consultants.
“The way that we are quantifying how efficient and the savings that the village is experiencing is by measuring time. For example, the amount of time that it took for us to collect data from departments on the budget this time around was a lot more efficient, a lot more transparent,” said Bueso.
The proposed budget is published completely digitally on OpenBook, the new software the village invested in for a more efficient budgeting process. The software offers an AI chatbot tool for users to ask questions of as they go through the information.
Another big change coming with the proposed budget is restructuring revenue sources. In order to try to offset what would have needed to be about a 13% tax levy increase to meet current village needs, according to Bueso, the village is reassigning just under $7 million in other tax revenue sources to the general fund for day-to-day operating expenses.
“It is important for us to outline that you know a lot of these capital projects will last 20, 30 years, and so we want to make sure that there is some generational equity related to who pays for those projects, and so that’s where that comes in,” said Bueso. “Collecting current revenues to fund current operation has been the one of the key elements that we want to explain here.”
These tax revenues previously went towards pay-as-you-go smaller capital routine maintenance and smaller improvements. For 2027, the village will bridge the gap from moving those tax revenues with surplus from the enterprise fund. The village is still developing a policy framework to establish a process for dedicating year-end surplus to such projects while maintaining appropriate reserves for the long-term, according to Bueso.
Bueso said that although the tax levy is increasing, the property tax rate is decreasing from 1.7% to about 1.58%. This is due to the estimated 17% increase in the equalized assessed value of properties in Oak Park.
“The property tax base grows as a result of values going up, but also it broadens when we have new investments in the community,” said Jackson. “What that does is it puts into context the importance of advancing economic development initiatives, to advance the board’s goal around affordability.”
The village tax levy, when looked at over years, has also remained under inflation rates said Bueso. Over the past five years, inflation adds up to about 24.5% and the tax levy increases over the same period of time only adds up to about 14%.
The village tax levy is only a small piece of the overall property tax pie with the majority of property tax dollars going to the two public school districts. Overall, there are about 10 to 12 taxing bodies overlapping on properties in Oak Park.
Bueso said for every property tax dollar collected, the village receives about 15 cents, the public libraries about 4.5 cents, and the rest goes to school districts, park district, Cook County and more. Out of the 15 cents taken in, only about six cents goes to the operating budget.
District 200 has a proposed levy increase of about 4%, and there will be a public hearing held at Oak Park and River Forest High School, 201 N. Scoville Ave., on Dec. 3.
Scaman shared her appreciation for the village staff’s work that went into creating the budget and listening to the board’s goals. She said she has had one of the lowest levy percentage increase since her term began in 2021. She also said she is hopeful the board will be able to identify some areas to help lower the levy before cuts have to be made as they try to balance important services for residents and affordability.
“We live here too. We pay taxes. We feel the impacts of the economy, and it drives a lot of our conversations, so the next steps are the opportunities for the village finance committee and then village board to roll up their sleeves and take a really close look at this and identify where it is that we feel comfortable falling,” said Scaman.
Starting on Oct. 29, the finance committee will have three consecutive weekly meetings for individual departments to present their budgets. On Nov. 17 there will be a Truth in Taxation public hearing because the proposed levy exceeds the 5% increase limit. There will be a presentation to the village board on Dec. 1 and the board is expected to vote on Dec. 8.
