Frankfort voters will decide if their sales tax should be increased by 1 percent after the village board Monday night unanimously agreed to place a referendum on the Nov. 6 ballot.
Trustee Cindy Heath, acting as mayor pro-tem, said in a video of that meeting, that the village is in “very sound” financial health but it could be in “critical” condition in three to five years.
Its current revenues are not sustainable for the long term without cuts in services, she said.
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Sales tax accounts for 38 percent of the village’s revenues, property taxes are nearly 24 percent, and income tax — which has been reduced by the state — is about 11 percent, according to village administrator Rob Piscia.
After rebounding a bit after the recession, sales tax revenues have been basically “flat,” he said in a telephone interview.
“Sales tax is the only tax that is supported by non-residents,” he said.
An 1 percent increase — from 7 to 8 percent — would generate an additional $2.8 million for the village, Heath said in the video. It would not be added to food, drugs and motor vehicles.
In adopting a resolution to place the sales tax referendum on the ballot, the board also adopted a second resolution stating that it would use the additional revenue for municipal operations, hiring more police officers and infrastructure improvements.
Heath also said that in recent years the village has reduced staff from 88 to 78 and delayed capital projects.
Last year, it levied new garbage fees, utility and telecommunications taxes to generate more revenue. Property taxes, which have not been increased in 10 years, have declined over the years, she said in the meeting video.
“We would be remiss if we did not seek alternate revenue sources,” Trustee Bob Kennedy said in the video. “We are not for or against this. We are just bringing the issue to the people.”
Trustee Mike Stevens said they are taking action now, rather than waiting until they are in a “crisis mode.”
If the referendum passes, Frankfort’s 8 percent sales tax would go into effect July 1, 2019, Piscia said.
The new rate would still be lower than most of its neighbors, according to salestaxhandbook.com.
New Lenox has the highest rate in Will County after increasing it to 9 percent on Jan. 1. Joliet is 8.75 percent, Homer Glen and Lockport, 8 percent; and Mokena is 7.5 percent. Tinley Park has two sales tax rates since it is split in two counties. In Will County, it is 7.75 percent and 9.75 percent in Cook County.
“We’re trying to be proactive and keep the village in good financial condition so we don’t have to raise property taxes,” Piscia said.