Mount Prospect considering sales tax increase

Raising taxes is never an easy issue, even when the tax burden would be shared with nonresidents.

So Mount Prospect is taking things relatively slowly as it ponders adding a quarter percent to its home-rule sales tax.

Trustees discussed the issue at this week's meeting. They have until Oct. 1 to file with the Illinois Department of Revenue in order for the increase to go into effect Jan. 1. They could also file in April and begin implementing it in July.

The 33 percent hike from three-quarters of a percent to 1 percent would provide more than $1.3 million annually to the capital improvement fund, which had been supported by surpluses in the past, but is virtually depleted. A quarter-percent increase would fund between $750,000 and $1 million annually in projects and also provide money to rebuild reserves.

Finance Director David Erb presented the village board with an alternative, suggested by Trustee Paul Hoefert -- taking the quarter-percent of the existing home-rule sales tax going to general operations and using it for the capital improvement fund. While boosting the fund, this would deplete the general fund balance below the village target of 25 percent.

The general fund currently has about $2.2 million more than needed to meet the target. But Village Manager Michael Janonis said the village plans to spend $500,000 to upgrade its phone system and $1 million to cover some costs for the new fire station on the north end of town.

Several trustees seemed receptive to the increase, which was initially recommended by the finance commission.

Trustee Tim Corcoran said the village's general fund is under pressure.

"There are certain things that we don't have control over, such as the cost of health care and pensions.

Corcoran said the reason someone wants to redevelop Randhurst is because the village invests in the community.

"They see the roads, they see the sewers, flooding improvements, investing in police, investing in fire, investing in this building (village hall) and they say 'That's the place that I want to be a part of.'"

He added that the village has been deferring capital projects for five years.

However, Hoefert and Trustee Arlene Juracek urged caution.

Hoefert said he sees the increase as premature.

"When you look at the next year and a half, we're still in a pretty good place."

He suggested the village take a longer look at the issue.

"I understand we're trying to put a permanent funding source in place for capital improvements, but I think there is a little breathing room here," Hoefert said.