Sales tax referendum, free vehicle sticker in FRG
Voters in Fox River Grove will decide in March whether to approve a sales tax increase after the village board voted to increase property taxes while giving out one free vehicle sticker per household.
During the March 20 election, voters will choose whether to approve an increase of one quarter of a percentage point in the sales tax and use the proceeds to spur economic development.
The village board has been planning to hold a sales tax referendum since this summer and formally approved a referendum ordinance Tuesday.
If approved by voters, the sales tax would increase to 7.25 percent from 7 percent — or an extra 25 cents per $100 spent. Village officials estimate that would yield an additional $100,000 to be used for infrastructure projects within business districts, Village Administrator Art Osten said.
“Primarily we hope to use it as the village’s contribution to downtown redevelopment,” he said.
The village is working on establishing its second tax increment financing (TIF) district in the downtown area along Route 14. The village board will hold a special meeting at 6:30 p.m. Tuesday to discuss the TIF district ahead of a public hearing scheduled for 7 p.m. Thursday, Jan. 19, during the regular board meeting.
In a TIF district, property values essentially are frozen for a period of years as far as governmental bodies are concerned, and taxes generated from increases in property value are funneled into public improvement projects in the district.
Last month, the board also voted 4-2 to levy 1.725 percent more in property taxes than the previous year. While the village requested, $983,804, they anticipates getting $820,000, or about $15,000 more than last year, Osten said. That would equate to an additional $10 in property taxes for every $100,000 in taxable home value, he said.
Trustees Michael Ireland and Gerald Menzel voted against the levy increase.
“First, I don’t see a justification for increasing it right now with the economy the way it is. Secondly, financially we’re in difficult times but we’re not in a hole,” Menzel said.
Trustee Steve Knar, however, pointed out municipalities get only one shot at capturing each year’s growth and cost-of-living increase. “It’s not a responsible thing to walk away from that revenue,” he said.
To compensate for the property tax increase, trustees unanimously voted to allow one free vehicle sticker per household when new stickers are due this summer, Knar said. Stickers are $20 for cars.
Giving out free stickers for one year will result in an estimated $15,000 to $20,000 loss to the village, Knar said. The finance committee will discuss Thursday how to implement the new rule as it relates to seniors, who already get a first discounted sticker at $2, he said.