Elmhurst's Sales Tax Projection – And Why

ELMHURST, IL – Elmhurst is receiving more sales tax income this year than it had originally projected.

The city budgeted $13.1 million in sales taxes in 2022. But it is on track to receive $13.8 million to $14.1 million.

The city attributes the increase to pent-up demand from the pandemic, inflation and the positive impact of internet sales tax legislation.

In July, though, the city began to see decreases year over year in sales taxes. That is believed to be the result of what's going on in the car industry.

"While car prices are at high levels, inventory cannot keep up with demand, decreasing revenues overall," the city's finance director, Christina Coyle, said in a memo this week.

The city is estimating it will receive $13.8 million in sales taxes in 2023. It said its amount in 2022 is expected to be a record high.

"While price inflation will help increase sales taxes, the pressure put on consumer spending by the increased prices may decrease overall purchases," Coyle said. "Also, the continued lack of supply for automobiles will continue to put pressure on that market."

As for building permit fees, the city expects to receive $1.7 million by year's end.

But rising interest rates are expected to decrease the construction of new homes. So the city is projecting it will receive $1.5 million in permit fees next year.