Elmhurst Makes Case For Tax Hike

ELMHURST, IL – An Elmhurst committee is poised to recommend increasing the city's sales tax rate by half a percentage point, to 1.5 percent.

The city said the money would help pay for $84 million in debt and future costs of stormwater projects through 2040. The tax hike is expected to bring in $4 million a year.

When the city took on debt in 2018 and 2019 for drainage projects, it identified no income source to pay the money back, according to a city memo released Thursday. Identifying such a source was later delayed by the pandemic, the city said.

Instead, the city dipped into its bank accounts to make payments. But officials said Elmhurst could not do that long-term.

The memo said the City Council's finance committee looked at other ways to raise taxes.

One of the methods was a stormwater fee based on how much each property contributed to the stormwater problem. But that was seen as too costly to administer.

Another way was a property tax increase. However, the city said family residential housing contributes 85 percent of property taxes. At the same time, housing only makes up about half of the surfaces such as pavement that are seen as big factors in flooding. So officials rejected a property tax hike.

The memo said the committee was reluctant to increase taxes. But it said residents made flooding prevention a priority eight years ago.

On Monday, the finance committee is set to vote on the recommendation, which the full City Council plans to take up at a later meeting.

The increase would take effect next January and expire a decade later, according to the memo.

The sales tax does not apply to car sales, common groceries, and qualifying drugs and healthcare items.

On Thursday, the city released a frequently-asked-questions document about the proposed sales tax hike.