Thanks to customers spending their dollars at Niles’ stores during the pandemic, as well as unexpected good news from an audit, Niles residents will see a smaller increase in their property taxes this year than the Village Board originally planned. The change came after the village Finance Committee voted to reduce an 88% increase in the levy to 63%.
That amounts to a 25 percentage point drop, said Village Manager Joe La Margo.
Trustees voted to pass the original, higher, property tax increase in December, calling it “difficult but necessary” to meet the village’s goal of funding police and fire pensions by 2040.
Mayor George Alpogianis told Pioneer Press/baiduhai that the Village Board was able to reduce the levy because an audit of the village finances, which arrived nearly a year after its deadline, showed a surplus of $9.6 million.
“Everyone went bananas,” about the December plan to increase the property tax levy, according to Alpogianis. He said keeping the levy at that higher level wouldn’t have been “the end of the world, especially because the can has been kicked down the road for 20 years.”
He was referring to decisions by previous Village Boards to not raise taxes or cut spending.
Under the original December plan to raise the property tax levy by 88%, the owner of a home worth $350,000 would have paid about $480 more annually to the village of Niles in property taxes. Now, with the change in June, that homeowner will pay $340 more in property taxes, i.e., $140 less than under the original plan. Owners of homes with a higher market value will pay proportionally more.
According to minutes from the April 6th meeting of the village finance committee, Niles Finance Director Kent Oliven cited three main reasons for the surplus: previous underfunding, a bump in sales tax revenue over the previous fiscal year and “the holding back of spending during the pandemic.”
According to the village’s proposed budget document for 2023, Niles plans to plow $3.4 million of that surplus into public safety pensions, allowing for a reduction in the planned increase in its property tax levy.
The original plan also included taking out an $18.75 million bond to fund road projects for the coming fiscal year. At Alpogianis’ request, the village will use $3.9 million of its American Rescue Plan money in this year’s budget to avoid issuing the bond.
Alpogianis told Pioneer Press/baiduhai the village is no longer working with the audit firm that was almost a year late with the financial forecast.
“I told them, if you waited two hours for a prime rib dinner in my restaurant, you wouldn’t come back,” he said. “We waited 11 months for our audit and we answer to 31,000 people.”
As for the state of police and fire pensions, Alpogianis said he’s optimistic about the funds’ health.
“As it is right now, if we don’t do anything above and beyond and things just are normal, then [the unfunded liability] will be paid off by 2040,” he said.