First in series of expected tax, fee hikes approved in Elk Grove Village
Elk Grove Village trustees Tuesday approved an increase in the municipal natural gas use tax - the first in a line of expected tax and fee hikes to fund nearly $5 million in annual road, sidewalk and drainage upgrades.
The bigger gas tax, expected to apply to residential and business Nicor Gas bills after July 1, marks an increase of 3 cents per therm of natural gas used, for a total of 5 cents per therm. Village officials estimate the higher tax will cost most homeowners an extra $2.50 a month - or $30 a year - and help generate $1.5 million annually for capital infrastructure projects.
The unanimous approval by the village board Tuesday night came on the consent agenda and without discussion. But it follows a committee meeting earlier this month when Mayor Craig Johnson unveiled a revenue plan to pay for an estimated $4.75 million in new annual expenditures that would ramp up street, sidewalk and rear-yard drainage improvements.
The plan also includes a property tax hike, a new stormwater fee and using an expected surplus from electric utility taxes to be brought on by new data centers coming on line. The new taxes and fees are estimated to cost the owner of an average $300,000 house $158 a year.
"We do not take this lightly," Johnson said. "I've been very proud for 14 years to hold the line on property taxes. But like anything, it can't go on forever."
"And more importantly, we look at what we're going to use the money for: roadway improvement. We need the roads. We need to stay strong. Our village is over 60 years old now. We've got to make sure those roads can keep going for the next 60 years."
Though formal board approval is still to come, Elk Grove plans to increase its general property tax levy to generate an extra $2 million a year for the capital projects. The village has held that levy steady, though it has regularly approved increases in the levies that cover police and fire pensions.
The property tax hike, which would first appear on bills in August 2022, would cost the owner of a $300,000 house $68 a year, officials estimate.
The new water/sewer user fee, estimated to generate $1 million a year, would cost most homeowners $5 a month, or $60 a year, officials said. It's proposed to be implemented at the end of fall or early winter.
Officials don't plan to increase the electric utility tax, which was implemented in 2013 to pay the principal and interest on a 2017 bond issue. The borrowing helped fund two new fire stations, a new public works headquarters and other projects in the Elk Grove 2025 long-range capital plan.
The electric tax is also earmarked to police and fire pensions, which village officials plan to devote additional funds to: an increase of $200,000 each, for a total of $800,000 annually per fund.
That will still leave about $250,000 a year for the latest infrastructure projects, they say.
"These projects go on for perpetuity," said Johnson, who wanted to implement the plan last year but delayed it because of COVID-19. "This is a major annual undertaking we're taking on."
Trustee Jeff Franke said he was initially "dead against" the tax and fee increases, hoping the village could tap other sources for more revenue. But after viewing presentations from consultants in April about long-term maintenance needs, he says he "realized how much we really need to get done."