First up is village of Hinsdale, which gets less than 10 percent of residents' property taxes
It's a common refrain in Hinsdale.
"We pay high taxes to live here."
And residents do - in part because their homes are worth a lot of money. But when they make that statement to Village President Tom Cauley, he has some additional information he shares with them.
"People assume that their property taxes go mostly to the village, and I tell them it's only 7 percent, and people are usually surprised by that," he said.
The village's portion of the tax bill - including the pension fund - comes in at 7.3 percent. So for every $10,000 in taxes a resident pays, the village receives $730. And that money pays for a number of critical services - police, fire, public services (engineering, road paving), water, sewer and community development.
"We also provide parks and recreation, which is a little bit different here in Hinsdale," village manager Kathleen Gargano said. "Others have park districts. We provide the services as part of what the government provides to its residents."
To help residents understand the distribution of property taxes, the village includes a graphic illustrating the portion it receives in its annual budget report.
"We think it's important to highlight, because we understand that for any community there is a great sensitivity to the property tax bill," Gargano said. "We think it's important to distinguish where their money goes."
Property taxes make up about 37 percent of village revenue. It also receives sales taxes, utility taxes, income taxes and fees for permits and other services. All local use sales tax receipts are dedicated to infrastructure improvements, noted Carrie Dittman, the village's chief financial officer. And while having multiple revenue streams is important, most are affected when the economy dips.
"A lot of those are tied to the economy, so while they might be significant, if you're in a poor economy, you're income taxes and your sales taxes and possibly your property taxes, if you're in dire straights, are going to suffer," Dittman said.
Gargano pointed to four significant investments the village has funded over the past 15 years, starting with the completion of projects identified in the master infrastructure plan. The plan included the rehabilitation of 69 miles of roadways, including 16 miles of water mains and 18 miles of sewers.
"2024 marked the end of the initial MIP, and we're beginning work on developing a subsequent plan to provide for the future," Gargano said.
The $9 million parking deck at the site of the Hinsdale Middle School, which opened in 2020, was another significant expense.
"The parking deck certainly was a considerably important accomplishment and that was an example of intergovernmental cooperation" with District 181, she said.
She also mentioned replacing the Oak Street bridge and addressing flooding issues on Madison Street.
One of the challenges the village faces is unfunded mandates from the state, with the most expensive being the pension contributions for administrative staff, police officers and firefighters.
"The village has no control over setting the benefit levels. They don't give us a funding mechanism to be able to meet their requirements," Dittman said.
The village used to have local control over police and fire pensions, but in 2019, the Illinois General Assembly passed pension reform laws to consolidate the more than 650 individual funds in the state into two, one for police and another for firefighters, each with its own board.
"Those boards are the ones that control the investments," Dittman said. "They control the assumptions used in actuarial evaluations that determine the contribution the village must make."
And for villages like Hinsdale restricted by the tax cap, which limits the increase in the levy (annual request for property tax revenue) to 5 percent or the CPI, whichever is lower, a large increase in pension fund contributions could spell trouble.
"Globally speaking, that's the problem," Dittman said. "If your pension contribution goes up 10 percent and your levy goes up 3 percent, you're going to be underwater."
Gargano noted that village expenses are influenced in large part by the priorities set by the village board.
"I think it's important to understand that the village board is highly sensitive to the impact of financial decisions on their neighbors and they are mindful of that when providing direction to staff," Gargano said.
Cauley said he believes trustees are good stewards of residents' tax dollars.
"I think we do a very good job," he said. "One of the things I tell residents is that while the community is a fairly affluent community, the village is not an affluent municipal government.
"If you go to some other towns, they have shopping malls or strip malls or industry that gives a substantial tax base," he continued. "I think people assume because it's an affluent community, the village is also well off. It's not. We really have to stretch a dollar."
