Lake in the Hills to end special taxing areas – but will increase overall tax levy instead

Lake in the Hills is getting rid of special service areas. But in exchange, it will impose a higher property tax levy on local real estate owners.

Special service areas are set up to levy a property tax just on owners within the area to provide specialized services within it. In Lake in the Hills, several were put in place when the village was experiencing residential growth in the 1990s and 2000s, according to village records.

But now the special service areas will be “dormant,” officials said. Village Administrator Shannon Andrews said during a Village Board meeting Tuesday that there has been recent discussion locally about the “continued value” of the special service areas.

Benefits of getting rid of them include streamlining their financial and operational management and having more equitable taxation among Lake in the Hills residents, Andrews said.

The village board gave the thumbs-up Tuesday evening to a nine-year plan to end the special service areas. They have different levies, with taxes per parcel ranging from $1.27 to $178.26, according to village records.

“This disparity is based on a number of variables, such as: the size of each SSA, the quantity of households, and the services being provided,” according to village material.

The plan would involve eliminating the levies for the SSAs this year and budgeting expenses until the levies are depleted, officials said. The expenditures would then be absorbed into the village’s general fund, but the village would need to raise its corporate levy “commensurate with the new burden of expense,” Andrews said.

Lake in the Hills would need raise its overall property tax levy by about $490,000. Lake in the Hills staff proposed increasing it incrementally over the next three years, with the levy increasing $163,420 each year.

This year’s $163,420 increase would be about 3%, and would equate to about $5.40 more in taxes for every $100,000 of home value, Andrews said.

A formal levy vote will come in December, but Andrews said whatever the board chose Tuesday would set the course for what happens then.

Lake in the Hills’ property tax levy has been flat for the past 15 years. No other annual increases to the levy are planned, so the village can keep the increase at 3%, according to village records.

The village board didn’t discuss the proposal before voting on the item, which passed unanimously.

About 6,770 local households are in a SSA, according to village records. There are about 10,000 households in Lake in the Hills, according to U.S. Census data.