With the 2025 fiscal year wrapping at the end of April, the village of Forest Park is yet again discussing what the following fiscal year will look like. In simple terms, it looks challenging.
At the first of three budget workshops on April 14, village staff and commissioners discussed goals for the coming months and years – planning ahead in order to start digging out of the financial hole that the village is in.
At the end of the 2025 fiscal year, the village expects to have a $2 million deficit in its general fund, which contains money that Forest Park gets from property, state and utility taxes, license and permit fees, and grants.
“This will potentially eliminate the gains we have received in the past couple years, taking the general fund back into a deficit,” said Letitia Olmsted, director of the village’s finance department, at the budget meeting.
At the time of the meeting, Olmsted hadn’t yet worked through where the village fell in its other funds, including water funds, VIP funds, plus capital improvement funds that finance infrastructure projects. With those numbers, the overall deficit is likely to be much higher. The village ended its last fiscal year with a total deficit of $11 million.
“Every department has remained at or under budget. That’s consecutive year after year. It’s just the fact that our revenues don’t offset our expenditures,” Olmsted said. “We don’t have the available resources to offset the costs.”
One of the reasons for the general fund deficit is a change to the local use tax. On Jan. 1, instead of Illinois distributing local use tax based on municipality population, it’s now being distributed based on location.
“Only things purchased in Forest Park and delivered in Forest Park, we will receive this use tax for. That is a huge loss,” Olmsted said, one of at least $350,000 to the general fund.
Another loss comes from federal grant cuts. These include a tree canopy grant through the U.S. Forest Service – used to plant, prune and remove trees – and a $6,000 building code grant from FEMA. There’s also a potential loss of $500,000 of Ground Emergency Medical Transportation funding, which comes through Medicaid.
Also affecting the village’s general fund deficit is the increase in the amount of property taxes going into the pension funds. From fiscal year 2024 to 2025, the village funneled $900,000 more into pensions.
“Since a lot of the cash that comes in from property taxes is allocated to police and fire pension funds, I’m having to borrow cash from other funds to pay bills and payroll,” Olmsted said. “The general fund currently owes about $1.25 million to the TIF and VIP funds.”
Olmsted said the village’s liability and workers comp insurance has significantly increased recently. It’s up about $61,000 from the previous fiscal year, and went up $345,000 over the last three years, in a three-year comparison to previous years.
While several factors negatively impact the village’s general fund, there are still options for new revenue. This includes money coming from permits and fees for new projects like U-Haul, Aldi and the townhomes built where Ed’s Way used to stand. Though Parkway Dispensary opened in October, Olmsted said its cannabis tax is “really not anything to talk about.”
After the state announced last June that it would cut its grocery tax next year, Forest Park will be presenting its own grocery tax ordinance in January. It won’t be new revenue but rather maintain about $400,000 that would disappear when the state eliminates its grocery tax.
Maria Maxham, commissioner of accounts and finance, suggested creating a Places for Eating tax in Forest Park to increase revenue. A 1% tax at restaurants would create $500,000 for the village, Maxham estimates.
“This is the one and only source of revenue that we have available to us that’s brand new and would be significant,” Maxham said. “I think we need to move on this immediately.”
Other suggestions for new revenue included booting cars to collect a large amount of outstanding revenue from unpaid parking tickets, and selling permits for on-street parking. Staff also asked about amending the leaf collection process and what it would take at a legislative level to get the village a higher percentage of property taxes.