FOX RIVER GROVE – Trustees appear ready to approve the village’s 2017 property tax levy request Dec. 7.
On Nov. 2, the Fox River Grove Village Board was in favor of a 2.1 percent increase in the levy, which amounts to a jump of $18,506 from the previous year.
However, that levy request hike will be offset by a $24,643 abatement on a portion of the village’s only outstanding general obligation bond, which could save residents about $48 on the village’s portion of their property tax bills.
That will result in a reduction in the property tax levy of $4,048 from the previous year, or a 0.4 percent decrease.
Village Administrator Derek Soderholm said that from the start, the Village Board wanted to hold the tax levy flat or find a way to decrease it. Ultimately, they elected to use the debt service abatement option to offset the 2.1 percent consumer price index increase.
“The board was committed to finding a way to hold flat or reduce the village portion of the tax bill for the second year in a row,” Village President Robert Nunamaker said in a news release. “As residents, we are acutely aware of the impact that property taxes can have on a household’s bottom line.”
There might be greater tax cuts on the horizon.
This time next year, the board could be voting on a more than 10 percent cut to the village’s portion of the property tax levy.
Looking ahead to 2019, residents should see a more significant drop in their property taxes paid to the village. That’s when the village will retire its only outstanding general obligation bond.
When that happens, a resident with a home valued at $200,000 can anticipate an annual property tax savings of $48, which would be a 10.6 percent reduction on the village portion of the bill, according to the village.
The expiring bond was issued about two decades ago to fund the construction of Village Hall and the police department, and it is coming to the end of its payment cycle.
The village’s police pension costs continue to rise faster than the allowed adjustment available to the village under the property tax cap law. This year’s projected consumer price index increase for the village is $18,506.
That cost will be abated, but the village’s required contribution to the police pension fund has increased by $62,600 – from $400,000 to $462,600.
The village constantly looks at ways to reduce costs to residents without sacrificing service levels, Soderholm said.
“We’ve taken steps the last few years to reduce costs by over $400,000 a year, on an annual basis,” he said. “That’s through decisions made by the board and carried out by staff.”
Soderholm acknowledged the challenges the small village is facing as it aims to reduce expenses without increasing the tax burden on residents. Cost-cutting often results in a loss of services, he said.
“We’re trying to stay ahead of this and provide a low-cost government with quality services,” Soderholm said. “That is getting more and more challenging every day.”
Fox River Grove’s portion of a resident’s tax bill represents about 6 percent of the overall property tax bill, while the other 94 percent of the bill is in the control of other taxing bodies.