Arlington Heights budget surplus could mean $50 tax savings for average homeowner

Thanks to higher than expected revenues, Arlington Heights officials plan to give back a portion of property taxes to residents later this year, while hinting that vehicle stickers and dog tags could be eliminated in future years.

The $12.4 million budget surplus is being divvied up eight ways, in a proposed transfer of funds recommended by Finance Director Tom Kuehne and endorsed by the village board this week. A formal budget amendment will be voted on at a board meeting next Monday.

"The village is fortunate to be in such a strong financial shape, and fortunate that we are in a position to ease the tax burden on our residents and businesses somewhat during these uncertain times," Mayor Tom Hayes said.

The abatement of $1.6 million from the general fund surplus will mean a savings of about $50 for the owner of a $375,000 home, which would be seen on the second installment property tax bill later this year, officials said.

The other allocations include:

• $2 million each to the police and firefighters' pension funds. Each fund experienced market losses of $15 million in 2022, after three straight years of higher returns.

• $3 million for future lead service line replacements. That would include seed money to develop a private lead line replacement incentive program, similar to the village's overhead sewer incentive program. About a quarter of the service lines on public and private property in Arlington Heights have lead, and a state deadline requires them to be replaced by 2044.

• $2 million for vehicle fleet replacements. Those costs have risen by 15% over the last two years, and the cash infusion would cover some of the additional expenses of planned purchases over the next couple of years.

• $1.2 million for water and sewer fund capital costs, including the water meter replacement project.

• $500,000 for the municipal parking fund, which has continued to see a decline in commuter parking fees due to remote working since the onset of the pandemic. In 2019, village public parking fees brought in $1.3 million. That declined to $883,688 in 2020, and dipped further to $800,104 in 2021. Revenues started going back up again last year to $848,000.

• $100,000 for various other capital projects. That includes a new battery system for emergency network power at village hall, upgraded technology in meeting rooms, and refurbishment of a 1961 fire engine that is an attraction at open houses and parades.

The surplus is a result of tax revenue that outpaced budget projections for food and beverage, home rule sales, sales, income, interest income and personal property replacement taxes. The last category comes directly from the state and is derived from corporate income, and as such is directly related to the economy, Kuehne said.

While acknowledging that revenue gains likely won't continue at this pace, village officials said they're prepared to recommend the elimination of vehicle stickers and dog licenses starting in the 2024 fiscal year. Further discussion is expected at a board meeting in June, when the annual budget planning process begins.