Elk Grove Village taxes expected to rise
The property tax levy to fund pensions in Elk Grove Village likely will increase by 15 percent next year in an effort to fully fund village employee pensions over the next two decades, officials said Tuesday.
It would be the biggest property tax increase in the 19-year tenure of Mayor Craig Johnson, who blamed Springfield lawmakers for inaction on fixing a broken pension system that covers municipal employees across the state.
"We can't solve this problem," Johnson said during Tuesday's village board meeting. "It's out of control. We are mandated by Springfield what to do."
Under the proposed levy increase, from $5.97 million to $6.89 million, the average Elk Grove Village homeowner would pay the village $25 to $30 more in taxes starting with tax bills received in September 2016.
Elk Grove manages three pension funds for some 300 village employees, including police, firefighters/paramedics and public works and administrative staff.
Johnson said the decision to increase property taxes to pay for pensions was prompted by a rise in the life expectancy of retirees from 110 to 120, determined by state actuaries.
To illustrate his point, Johnson used an image of Moses on his PowerPoint presentation Tuesday night.
"He's the only man I heard of being 120 years old, and last I heard, he never collected a pension," Johnson said.
Two other property taxes the village levies - for the general fund and for debt service payments - are decreasing incrementally.
Johnson announced the expected tax increase Tuesday, three weeks before the next board meeting, when the levy will be formally presented. The board is expected to approve it in December.
That will come two years after the largest single tax in Elk Grove history was instituted - an electric utility tax to pay for municipal pensions.
Officials say the tax has generated $500,000 more than expected ($5 million total per year), but that's still not enough to close a local pension funding shortfall.
All three of the village's pension funds were fully funded in 2000, but today, they're 65 percent funded.
Officials had hoped the utility tax would make local pensions fully funded in 15 years. But now they're hoping that tax combined with the increase in property taxes will fully fund pensions in 20 years.
Johnson asked Elk Grove residents to contact their local state representatives and senator. He says he's already passed along ideas to the governor.
Johnson favors putting new employees on a 401(k)-style plan, raising the retirement age and ending 3 percent cost-of-living increases in favor of increases tied to the Consumer Price Index.