Why Lake Barrington needs a new local sales tax and is boosting property taxes
Lake Barrington will use a new local sales tax and a property tax increase to help ensure revenue keeps outpacing expenses, officials said.
Starting July 1, Lake Barrington retailers will need to apply the 0.5% home-rule sales tax on purchases. That'll bring Lake Barrington's overall sales tax rate to 7.5%.
Lake Barrington officials said the property tax levy increase in 2020 - the first in six years - means an owner of a typical $500,000 market value house will pay an extra $153 to the village, officials said. The village board approved the new local sales tax and the property tax levy boost last week.
Village President Kevin Richardson said his town has been financially prudent and long has held the line on taxes. However, he said, increasing costs in core services left Lake Barrington with little choice but to generate more revenue.
Richardson said the higher property tax and the sales tax are a fair way for residents and visitors to share in boosting village finances.
"We have been proud of the fact that we haven't had to raise the residential assessment in almost a half-dozen years because of our bias in keeping it as low as possible, letting people hang on to their hard-earned money for as long as possible," Richardson said. "We are certainly among one of the few communities that can point to this kind of success over the past decade or so."
Lake Barrington's new 0.5% home-rule sales tax will cost shoppers an extra $5 for every $1,000 spent in the village starting July 1.
An owner of a popular business that recently opened in Lake Barrington said he's not concerned. Andy Michaelis, owner of All American Reclaim at Northwest Highway and Pepper Road, said the overall rate still will be less than what many of his customers pay elsewhere.
"Most people understand they have to pay sales tax," Michaelis said.
In a memo to the village board, Treasurer Peggy Hirsch wrote that Lake Barrington reviewed its five-year budget plan with a specific focus on a potentially growing deficit.
"The village has worked hard at diversifying revenues so as not to be overly dependent on one revenue source such as a property tax levy," Hirsch wrote. "However, the combined cost of the three core village services - waste and recycling collection, police protection and road maintenance/snowplowing - has increased 11.6% over the last five fiscal years."
Lake Barrington projects an additional $300,000 in property tax revenue annually - rising to $788,000 total - and $215,000 from the local sales tax. The moves are expected to achieve a goal of having an extra $500,000 per year to balance revenue to expenses and maintain a high level of services for residents, according to village officials.
Village Administrator Karen Daulton Lange said the residential garbage and recycling, paid from property taxes, is expected to cost about $450,000 in 2020. A joint agreement with North Barrington for 24-hour-a-day police patrols from the Lake County sheriff's office places Lake Barrington's share of the cost at roughly $560,000 next year, she said.