Forest Park is proposing to increase the tax levy for the 2023 tax year – but this doesn’t necessarily mean that the property taxes will actually increase.
The village is proposing to increase the combined village/library levy to 6.5%. However, the number is misleading.
The old Brown/Harlem Tax Increment Financing District is expiring next year, which will create a one-time spike in tax revenue as the amount of money the taxing bodies get, which was frozen since 2000, returns to 2023 levels. Without increasing the levy, the village and the library wouldn’t be able to capture that extra revenue. But since the amount the property owners actually pay wasn’t affected by the TIF, the increase in revenue won’t be nearly as drastic, if it happens at all.
As a non-Home Rule municipality, Forest Park is subject to the Property Tax Limitation Law, which caps the overall tax levy increase at 5% or the change in the Consumer Price Index, whichever is smaller. The village also levies property taxes on behalf of the Forest Park Library, and the library’s levy is also subject to PTELL.
The village is asking for a total levy of more than $9.46 million, with around $2.1 million going to the library. In a Nov. 27 memo to the village council, Forest Park finance director Letitia Olmsted wrote that she expects the tax increase to generate $436,146 for the village, and additional $141,481 for the library. She also wrote that the levy shifts additional $905,818 to the police and fire pension funds, which will reduce the amount that goes to the village’s corporate fund, which covers most of the day-to-day expenses, and various special revenue funds by $468,673 compared to 2022 tax year. Olmsted noted that this increase is still below what the village actuary recommends, but supplemental payments the village makes every two weeks as part of its regular billing cycle, as well as funds from the Personal Property Replacement Tax, which the State of Illinois collections on municipalities’ behalf, could be used to bring the funding closer to 90%.
Under state law, municipalities are required to fund at least 90% of their pension obligations by 2040.
Olmsted also said that the increase may be lower than 6.5%. The Office of Cook County Clerk, which has the final say over the actual levy, establishes a “limiting rate” for all of the taxing bodies using a formula that takes into account the CPI for the prior year and the Equalized Assessed Value, which is in turn based on the actual value of the property and the State Equalization Factor, which is meant to bring some parity to the way properties are assessed throughout the state. The limiting rate is expected to be calculated by later summer 2024, and Olmsted wrote that she expects it to be reduced compared to the 2022 tax year.
If the taxing body levies more than the limiting rate, the extra money is simply deducted – but if it levies less than the limiting rate, then it only gets what it levied.
Olmsted told the Review that given all those complex factors, as well as the fact that Proviso Township properties are up for reassessment next year, she couldn’t speak to how the tax increase would affect Forest Parkers’ property taxes.
The village and the library traditionally accounted for a smaller slice of the tax bill than the school districts. Olmsted’s memo said that the village portion of the levy accounts for about 14% of the tax bill, while the library portion accounts for 5%.
The village council will hold the public hearing on the levy on Dec. 18 at 6:45 p.m. before voting on whether to approve it during the 7 p.m. meeting. In the meantime, the levy documents are available at the Forest Park Village Hall for inspection.