A decision by the Oak Lawn Village board to increase the utility tax on electricity bills and home heating bills with utility tax increases will cost the average resident $100 a year and generate $2.5 million for the Village according to Brian Hannigan, the Village’s Finance Director.
Village Trustee Robert Streit (Dist.3) voted against the tax increases stating that the administration was a poor steward of tax dollars and couldn’t be trusted with the additional money that adds up to $2.5 million dollars a year. Streit also said that the board had not presented a plan to the public on how the money would be used.
Trustee Alex Olejniczak, 2nd, said the higher utility fees are necessary. Village Manager Larry Deetjen said that the utility tax increases put Oak Lawn below the median for the 200 communities in the state. In 2012, Deetjen used the same argument unsuccessfully pushing the same tax increase. At that time, Olejniczak had a different response.
Olejniczak, according to the Oak Lawn Reporter in 2012, said, “We don’t live in these other communities, we live in the village of Oak Lawn.” Olejniczak added, “I like looking at what we can do in the village of Oak Lawn.”
In 2012, he was joined in opposition at the time by other board members who argued that utility taxes would not bring people into Oak Lawn. Trustee Tom Phelan called the utility tax increase proposal in 2012 “a recipe for disaster”.
Streit opposed the idea in 2012 and continued to oppose it Tuesday while Olejniczak argued in favor of the tax increase. Olejniczak rationalized his change in position by stating that the board did not want to raise property taxes.
Streit said that the “property tax excuse” was ridiculous. Streit explained that taxing electricity and heating bills is still a tax increase that’s paid for by the people of Oak Lawn. Streit called the utility tax “a hidden tax” that unfairly burdens those on a fixed income.
Deetjen used the same excuse for raising the utility tax rather than the property tax in 2012 and was told by Phelan “I agree with Trustee Olejniczak, it is so easy to continue to find different ways to find revenue,” Phelan said. “We are not paying higher property taxes, but we are raising three other things. That is like selling car to pay your mortgage. That’s not just irresponsible, it’s a recipe for disaster.”
In 2012, Phelan also said, “Perhaps it is time to diversify tax base and get away from property taxes, but in this situation, this is reckless. Hey let’s raise it because someone else did? How about we lower it and attract people to move here?”
According to sources within the administration, the utility tax increases were reviewed along with the idea of raising property taxes or increasing the local motor fuel tax.
Motor fuel taxes are generally used for road repairs. The last motor fuel tax increase was used to fund payments on bonds to repair streets. However, the street repaving and reconstruction program has virtually come to a halt since the election of Sandra Bury and her majority board members in 2013.
A 6 cents per gallon motor fuel tax generates $1.2 million and is preferable to some because non-residents would likely contribute 50 %, of the taxes. According to officials within the village, examples in the past have shown that if you own two cars, fill up twice a month, likely using about 35 gallons month that tax per home would be about $12 a year. (35 x .03 = $1.05 increase per month or $12.60/year) compared to $100 a home, according to Hannigan, for the utility taxes.