Fate of Kane County property tax hike hinges on upcoming budget vote

Editor's note: This story has been updated to correct the difference between county reserves and the amount the county needs in reserve per its own financial policies.

With only a few weeks remaining in the budget year, Kane County officials signaled this week they favor a property tax increase over a gas tax hike to plug a 2024 budget hole.

County board members spent the past few years debating a variety of ways to solve future spending needs - primarily a payroll that regularly sees employees leave for similar but better-paying jobs in neighboring counties. But a windfall of federal COVID-19 relief money delayed the need for any immediate decisions.

With the brunt of the pandemic over, and the federal cash infusion dwindling, the county board returned its attention in recent months to seeking long-term solutions for how to pay its bills and fund raises for county employees.

Possible solutions include a property tax hike, a county gas tax increase, spending down remaining savings and placing a new county retail sales tax on ballots. Each of those has pluses in terms of how much money they would net the county - counterbalanced by minuses of how much they would cost taxpayers.

A contingent of local residents, organized in part by the Kane County Republican Party and local libertarians, have rallied against any tax increases throughout most of the budget discussion. And they've signaled payback for higher taxes will come the next time county board members are up for reelection.

Those voices appeared to resonate this week as attempts to include a gas tax hike (from the current 4.7 cents per gallon up to 8 cents per gallon) into the 2024 budget failed by large margins.

"That would be a 70% increase in the county motor fuel tax for all people who buy gas in Kane County," said county board member Bill Lenert, one of the leading voices against the tax. "That amounts to over $30 per year. This really isn't an option for people. If you have a car, you are going to pay the additional tax. That, on top of a property tax increase, is substantial enough that I think our taxpayers are being burdened in a way that is going to create a hardship on many people."

Despite a push for the tax by county board member Vern Tepe and county board chair Corinne Pierog, the gas tax increase failed in committee and will not be part of the 2024 budget that will be before the full board for a final vote later this month.

But a property tax increase that would see the average Kane County homeowner paying between $12 and $15 more to the county next year is still on the table.

Supporters of the property tax increase say the $2.5 million in new money it will generate will help resolve the county's projected budget deficit for 2024. The budget plan already calls for using $9.7 million in reserves to plug the hole. Without the property tax hike, the county would need to dip into the reserves to the tune of about $12 million.

Republicans, which control only eight votes on the 24-member county board, have also labeled the property tax increase as unnecessary. That belief stems from the $85 million in savings the county has in its general fund, $55 million more than the county needs in reserve per its own financial policies.

But Democrats on the board point to that evaporating pool of savings as evidence that the county will need some kind of cash infusion in the near future.

"Can we get by for another year? Yeah," Tepe told his fellow board members. "But we are just kicking the can down the road. If we are afraid to face the hard issues, shame on us."

In committee, the pending property tax increase made it to the final draft budget with a 7-4 vote. It will need at least six more supporters when it gets to the full county board.

Several county board members, including a mix of Republicans and Democrats, have a different plan in mind. That plan involves no tax increases in 2024 but pursuing the creation of a new county retail sales tax. That plan has the potential to generate more ongoing revenue than either a gas or property tax hike. But it will need voter approval via a referendum.

The county board must put a 2024 budget plan in place before the current fiscal year ends on Nov. 30. The discussion of a new retail sales tax will start in December.