The village approved a higher tax levy for the 2023 tax year – though that number won’t necessarily reflect how much will actually be levied.
Unlike last year, when there were some rumblings about how tax increase would affect residents, the Dec. 18 vote was straightforward. No one spoke during the legally required tax levy hearing, and the commissioners approved it unanimously and without comment.
The village has increased the tax levy to 6.5%. But the number is misleading. The Harlem/Brown Tax Increment Financing District was officially terminated during the same meeting, 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 caps for the two entities will be calculated separately.
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 Forest Park finance director Leticia Olmsted indicated in the past that she expects it to be reduced compared with the 2022 tax year.
To further complicate matters, under the state law passed in 2021, the amount of money taxing bodies lost when they had to issue refunds get added on to the next year’s tax levy extension. In other words, the village and the library would be able to collect the amount of money they had to refund, and those amounts don’t fall under PTELL caps.
In a Dec. 15 memo to the village council, Olmsted laid out what the village levied for the 2022 tax year and what it actually ended up getting. It notes that while the county reduced the levy for the 2022 tax year, it was balanced out by what the village and the library got thanks to the refunds. The village ended up getting a little more than $100,000 more than it originally levied, and the library got a little more than $20,000 more.
Olmsted’s memo noted that the portion of the levy that doesn’t go toward police and fire pension funds will decrease compared to what was levied for 2022. The portion that covers most village expenses would decrease by $176,163, and the portion that goes toward Illinois Municipal Retirement Fund and Social Security will decrease by a total of $109,000.
Olmsted has indicated 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.