Why Kane County might need to raise property taxes to cover union contracts

 
 
Updated 3/28/2018 8:27 AM

The likelihood of an increase in Kane County's largest cost may force consideration of the largest property tax hike possible without a voter referendum.

County officials are renegotiating all union employee contracts, which expired at the end of 2017. Personnel is the largest cost in the county's general fund budget. Up until last year, the county board matched those union increases for all non-union employees.

                                                                                                                                                                                                                       
 

But county finance department officials shared numbers Tuesday indicating absorbing even a 1 percent raise for county employees will be difficult. A 1 percent raise for all county employees would cost about $868,000.

A 1 percent increase to the county's property tax levy would net about $496,000. That could combine with about $236,000 in recurring income that is not already earmarked for forecasted non-personnel expenses. That still leaves the county a little short, unless board members cut costs or go against finance department recommendations and dip into savings.

A 1 percent raise may be wishful thinking. In recent years, union negotiations, including disputes leading to binding arbitration, have resulted in nothing less than 2 percent raises for union employees.

That reality caused county board member John Hoscheit, who leads the board's finance committee, to ask finance officials exactly how much the board can raise property taxes.

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Tax cap law limits the county to property tax increases of 5 percent or the Consumer Price Index, whichever is less.

The most recent CPI was 2.1 percent. The county board could tack on an additional, small increase to account for new property coming onto the tax roll.

A full CPI levy increase plus the new property would represent the maximum allowable property tax increase the county board could levy without asking voter permission. It would also be the first time during county board Chairman Chris Lauzen's tenure that property taxes would increase as much as possible.

In an interview, Hoscheit said he's positive the county board will work out a solution, but it won't be easy.

"Whatever we do has to be based on what our available financial resources are," Hoscheit said. "That's going to be a challenge with the funds we currently have. Adding in the CPI to the tax levy increase, that's another 2.1 percent, but that's got to be the will of the board to do that. And our position has been pretty steadfast against that. So none of these discussions are going to be easy. But there's an economic reality we have to face, too."

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