Wheaton proposes modest tax increases as part of next budget

Wheaton City Council members will review the draft 2026 budget — and a proposed mix of modest tax increases — during a workshop session next week.

The city plans to issue bonds to finance a renovation of the police station off Liberty Drive and the replacement of an aging Fire Station No. 39 on the existing site along President Street.

“We have been extremely prudent in our approaches with respect to revenue. And quite frankly, we benefited from the growth we've seen in sales tax from the things we've done in the downtown,” Mayor Phil Suess said.

But, the city is “confronted with some very significant capital improvements that we’re going to fund through bonding, and we need to be able to cover the cost of that bonding,” he said at a recent planning session.

Based on council feedback, city staff has recommended a combination of a 3% increase in the property tax levy, an increase in the local sales tax rate from 1% to 1.25%, and an increase in the natural gas use utility tax from 3 cents per therm to 5 cents per therm.

The city last increased the local sales tax rate more than 15 years ago. The city has had no increase in the property tax levy for six years through this year. About 11.4% of a resident’s property tax bill goes to the city.

Suess said officials have “done the right thing over the years in not touching the property tax.”

“I also think it's important in our overall structure to balance these things, and it's a more predictable revenue source than sales tax. So I do think it would be a mistake just to do this strictly on sales tax,” he added.

The goal is to “at least get the police station moving” in 2026, City Manager Michael Dzugan said. That facility was constructed 35 years ago. The fire station was originally built in the early 1970s and needs to be replaced not only from a material and structural standpoint but also from a functional one as well, Dzugan said earlier this year.

The city has a rough budget of a little over $20 million to do both projects, he said Wednesday.

Councilman Bradley Clousing and other officials noted the local sales tax also would be paid by non-residents who “enjoy a lot of the things that Wheaton offers.”

“If we're to increase it a quarter percent, that would be about 25 cents per $100 spent by a consumer,” Finance Director Robert Lehnhardt told the council.

Regarding the natural gas use utility tax, the average Illinois household uses 89 therms of natural gas per month, according to the city.

“That's a way to get some participation from the not-for-profits, who utilize our services but aren't paying the expenses to the same extent we are or ordinary residents,” Suess said.

The council also considered whether to create a new revenue source with a food and beverage tax.

“The food and beverage tax strikes me as more of an entertainment choice,” Councilwoman Erica Bray-Parker said. “I would lean towards putting a tax on that and the local sales tax.”

Suess raised concerns with such a tax and said he’s “really not comfortable singling out one particular industry.”

A food and beverage tax also would be locally administered. City staff would handle management and collections, requiring additional costs to ensure compliance and that monthly tax filings are processed, documents state.

“I do think we should be looking at a contribution from the property tax just because of the volatility associated with the sales tax,” Suess said.

With a 3% increase in the property tax levy, the owner of a home with a fair cash value of $500,000 could see a projected $35 increase in the city’s portion of their property tax bill. That's an estimate based on what might happen with assessed values in the city, Dzugan said.

The budget workshop session is set for Monday, Nov. 10. The public meeting will begin at 6 p.m. in the council chambers of city hall, 303 W. Wesley St.