New streaming tax helps Arlington Heights avoid property tax levy hike
Bolstered by better-than-expected revenues from building permits, pension investments, and taxes on sales and income — plus a new streaming tax — Arlington Heights won’t increase its property tax levy in 2027, officials said.
The flat levy comes after increases of 2.29% in 2026 and 2.46% in 2025, following five consecutive years with no hikes.
Finance Director Melissa Gallagher said she and fellow department directors at village hall “rolled up our sleeves and went to work” after an initial June budget planning session with village board members, who told them to keep the levy flat or as low as possible.
“It did take a lot of iterations, a lot of departmental discussions,” Gallagher said Monday on the first night of discussions for the village’s 2027 proposed $238.9 million spending plan.
With higher prices for fuel, the cost of living and a 3.7% rate of inflation, Mayor Jim Tinaglia called the flat levy “pretty remarkable,” attributing it to “a little bit of luck, a lot of really good planning, and a lot of hard work from staff.”
Revenues from the 5% tax on streaming entertainment subscriptions — implemented a year ago to help pay staffing costs of six new paramedics for a fifth fire department ambulance — came in above initial estimates: $1.2 million is projected to be in village coffers by year’s end, while only $450,000 was anticipated, officials said.
The new tax was seen as a way to help backfill cable franchise fees and telecommunications taxes that have declined from cord-cutting.
The 2027 budget also incorporates the board’s previous endorsement of a police department plan to hire a dozen cops over the next three years, restoring staffing from recession-era cuts made two decades ago. The first four new cops would hit the streets next summer.
The village also plans to hire a part-time deputy village clerk to help with increasing numbers of Freedom of Information Act requests — 2,000 a year in the past, but on pace to top 3,000 this year — that officials attribute in part to artificial intelligence.
Even with 4.5 new full-time-equivalent personnel in 2027, village government has some two dozen fewer employees than it did 25 years ago.
The budget also calls for $50 million in capital projects spending, including a $5.7 million reconstruction of Campbell Street, $1.1 million resurfacing of Windsor Drive, $4.7 million for water main replacements, and $4.2 million for new lead service lines.
Because of the better-than-expected revenues, Arlington Heights is on pace to have a $4 million surplus in its 2026 budget. Though the plan is subject to year-end results and board approval, Gallagher recommends allocating $2 million to capital projects, $1 million to lower future pension levies, $500,000 to the parking fund, and $500,000 to the fleet fund.
While a formal board discussion is expected in January or February, some trustees Monday offered ideas of their own.
Trustee Wendy Dunnington renewed her call to eliminate the 1% local grocery tax by 2028, while Trustee Colin Gilbert suggested awarding village staff bonuses for hard work.
A department-by-department review of the 387-page budget proposal will continue at 7 p.m. Thursday in the third floor boardroom of village hall. Final approval of the budget and levy is expected Dec. 7.
cplacek@dailyherald.com