Arlington Heights set for first tax levy hike in five years
Arlington Heights trustees are poised to approve the first village property tax levy increase in five years, as sales and income tax revenues start to level off.
The proposed 2.46% increase is slightly less than the 3.51% hike village staff sought during an initial financial forecast over the summer, when trustees told department heads to go back and tighten their belts.
“Everybody really looked hard at their budget and came up with some good ways to save money without sacrificing the high service levels that our residents have come to expect,” Village Manager Randy Recklaus said Tuesday during the first night of discussions over the 2025 budget.
The tax hike would translate into a $29 higher tax bill for the owner of a $425,000 home.
Along with the library board’s proposed 2% levy increase — which is passed through the village’s finance department — homeowners would pay an average of $38 more.
That’s only a fraction of a resident’s total property tax bill, of which schools encompass about two-thirds.
Still, Trustee Wendy Dunnington questioned why the village couldn’t dip into its $36.5 million reserve fund to avoid a tax increase.
Finance Director Tom Kuehne, who is overseeing his 21st and final budget ahead of his upcoming retirement, said he’s always recommended not using one-time revenues to fill operating gaps, preferring to save reserve funds for economic downturns or emergencies.
“The gap’s going to be there year after year,” Kuehne said. “It’s a very slippery slope.”
Arlington Heights is more reliant on sales and income taxes than other towns — 41% of general fund revenues come from those sources — but it’s also more susceptible to economic swings. Those taxes’ growth in recent years due to inflation and supply chain issues allowed the village to keep its property tax levy flat, officials said, but that’s expected to change.
The proposed $232.3 million spending plan for 2025 is a 10.6% decrease over the last budget.
It includes increased fire department overtime to staff a fifth ambulance, amid a 15% increase in calls over the last decade, officials say. By 2026, the department plans to staff the ambulance full time.
The village also plans to spend $11.1 million to resurface, rehab or patch streets; $4.3 million for new water mains; and $4.2 million to replace lead service lines.
The village has been setting aside money in recent years to replace the 4,200 known lead pipes in town — a project that could cost $40 million in total and is required by 2037 under federal and state regulations.
A department-by-department review of the 399-page budget proposal will continue at 7 p.m. Thursday in the village boardroom, with another meeting, if needed, at 7 p.m. Tuesday, Nov. 19. Final approval of the budget and levy is expected Dec. 2.