Title
2012 Residential Property Tax Rebate - Ordinance Approval
History
Beginning with the mailing of checks in March 2003 and concluding with the mailing of checks in March 2009, the Village issued residential property tax rebates of approximately $27.6 million. These rebate amounts were included in the Village’s budget in fiscal years 2002 thru 2008. Due to the economic downturn and the effects this had on the Village’s home rule sales tax revenues, as well as the significant amount of funding needed for a number of capital projects that the Village was undertaking, the Village suspended the residential property tax rebate program beginning with the fiscal year 2009 budget.
Recently, the Board requested that staff determine if there is any funding available so that the Village could reinstitute the rebate program in fiscal year 2012. Staff has identified funding in the amount of approximately $2.633 million that could be used to fund the rebate program. This funding comes from a number of items, as reflected on the attached schedule. A significant amount of the funding comes from savings on various capital projects that have recently been completed by the Village. Based upon the amount identified as available, staff recommends a rebate in the total amount not to exceed $2.5 million. This total amount would be a rebate of the 2011 property taxes paid by residents in 2012. Residents would receive the rebate in March 2013.
Up until the last rebate cycle, an applicant's rebate amount was equal to the total amount to their tax bill that was paid to the Village of Orland Park. For the last rebate cycle, the Board chose to cap the total rebate at $4.5 million. Therefore, each applicant received their proportionate share based upon the amount of property taxes paid to the Village as compared to the total property tax paid to the Village by all qualified applicants. Based upon this allocation method, each applicant received a rebate equal to approximately 83% of the total amount they paid to the Village; there were 18,215 applicants, with an average rebate amount of $247. For the proposed rebate cycle, the Board may chose to evenly divide the total rebate amount amongst all applicants or may chose to allocate the total rebate based upon the amount of property taxes paid to the Village. If the $2.5 million rebate is equally divided, holding constant the number of applicants, each applicant receive a rebate amount of approximately $137.
Attached is the ordinance that would establish the 2012 property tax rebate program in an amount of $2.5 million. The ordinance provides for a rebate of 2011 real estate property taxes paid by residential taxpayers in 2012.
Staff will implement a process that simplifies the application process and allows for the electronic submittal of application information. Residents will be advised of the application process in early October. As in past years, staff will set up a Tax Rebate Phone Line that applicants can call if they have any questions related to the rebate program. In addition, staff will establish an e-mail address that applicants can send questions to. We will also have a list of frequently asked questions listed on the Tax Rebate section of the Village’s website. Rebate checks will be mailed approximately the week of March 18, 2013 to the homeowner living at the address for which the real estate property taxes were paid.
Also, attached is a spreadsheet of budget adjustments necessary to reinstate the Residential Property Tax Rebate program in FY2012. The proposed rebate is $2,500,000; $97,190 is also being requested to cover the cost of rebate program operations. The funding sources for the rebate program consist of projects budgeted for in the Capital Improvement Fund that will have savings in the amount of $2,347,190; detail of these savings is included on the attached spreadsheet. An additional $430,000 is available from the sale of land currently held in inventory. Overall, the reinstatement of the rebate program will require an increase of total budgeted revenues in the amount of $2,847,190 and total budgeted expenditures in the amount of $2,847,190. The $430,000 that will be derived from the sale of land will not be recorded as revenue as this land is reflected on the Village’s financial statements as land held for resale.
On July 2, 2012, this item was reviewed and approved by the Finance Committee and referred to the Board for approval.
Recommended Action/Motion
I move to pass Ordinance Number 4749 entitled: AN ORDINANCE PROVIDING FOR REIMBURSEMENT OF $2.5 MILLION OF THE VILLAGE SHARE OF REAL ESTATE PROPERTY TAXES PAID BY OWNER-OCCUPANTS OF RESIDENTIAL REAL ESTATE IN THE VILLAGE OF ORLAND PARK;
And
Move to approve distributing the $2.5 million rebate evenly amongst all applicants;
And
Move to approve increasing the FY2012 revenue budget by $2,847,190 and the FY2012 expenditure budget by $2,847,190.