The village of Niles, long known for its low property tax rate in comparison to surrounding communities, is preparing to ask residents and business owners to pay a significantly higher amount in taxes starting next year.
A public hearing to consider an 88% increase in the village’s 2021 tax levy, which totals $13.9 million, is scheduled for Tuesday, Dec. 14 at 6:30 p.m. at Niles Village Hall, 1000 Civic Center Dr. Comments from the public will be taken during the meeting.
According to Niles Director of Finance Kent Oliven, the increase, if approved, will cost the owner of a $350,000 home approximately $469 more in property taxes to the village next year.
The proposed increase will raise an additional $6.5 million for the village over last year, according to information shared with the Village Board on Nov. 16.
The village’s portion of a property tax bill is approximately 7%. Taxes collected for schools make up the bulk of the bill.
The new revenue will help fund police and fire pensions, village road construction and deferred capital projects, Oliven said.
“We’re trying to solve long-term problems and set them on the correct way,” he said.
Oliven explained that the village needs additional revenue in order to meet its goal of fully funding police and fire pensions by 2040. The proposed 2021 levy includes $6.3 million for pensions, which is a 141% increase over last year and was recommended by the village’s actuary, Oliven said.
More Top Picks Best Visual Timers For Autism
Over the past several years, the village’s contributions toward pension obligations have been “rising dramatically” he said.
“Those contributions have been slowly swallowing the general fund,” Oliven explained, referring to the village’s main operating fund. “The general fund has gotten to the point that it is not resurfacing roads, it’s holding off on a lot of capital projects.”
Village streets are in need of repairs and in need of a sustainable funding source to maintain them, Oliven added. Annual maintenance costs about $3 million, but the village’s motor fuel tax only generates about $1.2 million a year, he said.
The budget adopted by the village this year calls for borrowing $18.7 million for road restoration work.
Niles Mayor George Alpogianis, who was elected earlier this year after eight years as a village trustee, agreed that the increase in taxes is necessary.
“We have got a situation ahead of us where we unfortunately have to raise taxes,” he said. “The biggest of the burdens is the pension deficit. It’s something that is due and that we’ve go to make right. And we’ve been doing our best.”
While the bulk of the village’s revenue from marijuana sales and video gaming proceeds is used to cover pensions, it is still not enough, Alpogianis said. He acknowledged that “more could have been done” to better fund pensions earlier and that for a time, the village was only covering the interest on pension bonds.
“For this community to stay strong and vibrant and move forward, we need to make sure we’re not just putting money toward things like interest when we can be putting the money toward capital projects,” Alpogianis said.
Niles Trustee Craig Niedermaier said the pushing off road repairs only makes the projects more expensive when they do occur.
“This endless kicking the can down the road thing actually ends up costing a lot more money in the end,” he said. “This (levy) is a way of putting on our big boy pants and doing it the smart way.”
Even with the proposed increase in the levy, the village will continue to have the lowest municipal tax rate among its neighbors and other comparable communities, Oliven said. Among these are Des Plaines, Morton Grove, Park Ridge and Skokie.
“We’re still under the average municipal rate,” he said.
Last year, the village’s tax levy was increased by 13.8%. The previous year, the increase was 4.9%, according to the village.
Oliven has also recommended that money levied for a portion of municipal garbage removal costs be used for road maintenance and that residents be billed for garbage pick-up separately on their village utility bills.
Oliven said most municipalities, with the exception of neighboring Park Ridge, have moved to charging residents separately for garbage service, rather than through property taxes.
This measure will still require approval from the Niles Village Board.
Alpogianis called upon taxpayers to “trust the elected officials.”
“As much as things like this (tax increase) may sound scary, (residents) need to focus on the end result and what we are moving froward to attain: A better, nicer, cleaner, stronger, more vibrant community,” he said.