Kane County may increase property taxes to cope with rising costs

Kane County officials are poised to do something they haven't done in more than a decade -- approve a property tax increase.

But at least a handful of county board members are not yet convinced that the county government needs more money.

Former Kane County Board Chair Karen McConnaughay put a property tax levy freeze in place the final year she was in office. The levy has remained frozen since then, except for accounting for new property coming onto the tax roll.

But that 13-year freeze is on the verge of a thaw as increasing pay and benefits for county employees has become a primary budget focus since Democrats took over control of the county board.

Kane County has long been a place where new state's attorneys, public defenders, sheriff's deputies and other government workers begin their careers, get training and experience, and then move on to the same roles, but at higher salaries, in neighboring counties. Democrats have pushed to stop that perpetual loss of talent by making -- and keeping -- salaries more competitive.

But that means finding more money. And Kane County CFO Kathy Hopkinson has been telling the board for months there is no more money. The county used federal dollars that came into to shore up local governments during the COVID-19 pandemic to cover some of its salary costs for the past couple of years. The pandemic is officially over, making any remaining COVID funds ineligible to pay salaries. Hopkinson told the board it won't be able to survive on the county's piggy bank for long.

“Next year, our expenses will be higher because our salary and benefits will be higher,” she said. And the year after that they will be higher. In a couple of years, our reserves will be wiped out.”

The county has about $53 million of reserves beyond the 90-day cushion bond rating agencies require for good financial health.

However, the proposed 2024 budget sees $11.6 million of spending that is beyond the income the county will bring in.

To help cover that, a mix of some savings, pulling some cash away from transportation department projects and a 3.7% property tax increase are on the table.

Depending on where they live, Kane County taxpayers would pay between $1 and $17 more in property taxes if the board approves the plan. The average resident paid $260 in property taxes to the county last year. That bill would increase to $267.

That's just the line on property tax bills that goes to fund county government. Any tax increases approved by local school districts or municipalities could also increase local tax bills.

Heading into a vote that will lock in the 2024 budget next month, there seems to be a majority of Democrats on the board sufficient to approve the tax increase. Michelle Gumz has been one of the more vocal Democrats on the county board supporting the tax hike. She said the county can't afford to keep losing quality law enforcement workers.

“Without that federal (COVID-19) money, we'd be broke,” Gumz told her fellow board members this week. “Nobody wants to talk about taxes. We need great, experienced people giving the best services that are available to the residents of the best county in the state.”

Not everyone on the county board is convinced the county can't have quality employees and still maintain a tax freeze -- at least for another year or two. Some Republicans, including county board member Bill Lenert, believe projections indicating potential large increases in money earned on investments and interest on savings may be enough to stave off the need for a tax increase.

“If we're bringing down our reserves, what does it matter if we are taking it from our savings or from interest earned?” Lenert argued.

Hopkinson urged against relying on investment and interest income to fund ongoing expenses because that money could vanish if the market or economy takes a downturn.

County board Chair Corinne Pierog said it's important to consider the county's long-range finances and the services the county provides.

“We've come to a crisis point in our budget,” Pierog said. “In two years, if all is equal, we are going to have to start eliminating positions. If you would like less government, then we're moving in the right trajectory. But I challenge you on what does that mean. I believe we are providing no more than what is needed and less than is wanted.”