Elgin’s proposed 2026 budget includes a 13.2% property tax hike to help cover growing costs, capital projects, new employees, and police and fire pensions.
In advance of budget review meetings that start Wednesday, the Elgin City Council was given an overview Wednesday of the $407.6 million spending plan by City Manager Rick Kozal.
He noted that Elgin “has not increased its general property tax levy for more than a decade,” something they’ve been able to achieve by diversifying the city’s revenue streams starting in 2012 so that core city operations were funded without requiring more property tax money.
However, “inflationary pressure necessitates an increase in revenue to continue providing the services residents have come to expect,” he said. “Today, the city is being confronted with an increasingly complex and shifting fiscal landscape.”
Increasing property taxes will raise the property tax levy for general operations by $4.2 million, Kozal said. Currently, the city collected $27.8 million in property taxes. A tax hike would increase the total to $32 million, according to the proposed budget.
He did not disclose what the increase will mean dollar-wise for the portion of the property tax bill paid by Elgin homeowners to the city.
There are no other tax increases proposed in the 2026 budget, Kozal said.
Wednesday’s discussion was an overview of the proposed budget.
“There will be more granular-level information with presentations from the chief financial officer and from the city’s department heads as it relates to their initiatives in the budget,” Kozal said.
This year’s capital improvement proposed projects will cost $113 million, up from the $85 million budgeted last year. Among the work planned will be the reconstruction of Dundee Avenue-Center Street-Villa Street and of National Street and installation of a new roundabout at the Highland and Lisle avenues intersection.
The spending plan also calls for the city to hire 15 full-time equivalent employees, nine in the parks and recreation department, four in public services and one each for the cultural arts and special events department and the police department.
Public safety pension obligations are increasing because there was an increase in the number of retiring police officers, officials said. Illinois consolidated the police and fire pensions across the state and is in charge of determining contributions.
Elgin’s tentative budget can be viewed on the city’s website, elginil.gov, which also explains the budget process, city revenue sources and what each department is requesting for the upcoming year.
According to the site, about 16% to 18% of each dollar a homeowner pays in property taxes goes to the city. The vast majority, 63% to 67%, goes to the local school districts, and the rest supports other taxing districts, including the county, library, community college and township.
How much a homeowner will pay in property taxes depends on the equalized assessed value of their property. According to realtor.com, the median listing price for an Elgin home in September was $349,000, an increase of 4.2% over the previous year.
Gloria Casas is a freelance reporter for The Courier-News.
