Updated: April 6, 2014 6:36AM
Tinley Park trustees Tuesday night approved a village sales tax of 0.75 percent that will take effect July 1 and apply to most purchases except groceries, prescription medication and vehicles.
With village officials expecting expenses to begin surpassing revenue as soon as next year, the sales tax, which the village had resisted adopting in recent years, was seen as a more palatable alternative to a possible property tax increase.
Trustee Dave Seaman, chairman of the village board’s finance committee, noted that some neighboring towns, including Orland Park, have a local sales tax, and Tinley Park following suit was being done with a “lot of reluctance but basically out of necessity.”
The local tax will raise the sales tax in the Cook County portion of the village to 8.75 percent and to 7.75 percent in its few areas in Will County. It’s projected to generate about $5.4 million per year.
The village projects that the tax will cost the average household $123 annually but that half of annual revenue from the tax will come from nonresidents making purchases in Tinley Park.
Despite tight fiscal controls, including not filling open jobs, the village expects that its revenue will fall short of expenses starting in the 2014-15 fiscal year that begins May 1.
The new sales tax will not only help village officials avoid hiking the property tax, it will provide a way to pay for the costly removal and replacement of ash trees infested by the emerald ash borer — estimated to reach or exceed $6 million.
The sales tax income also would help pay for street repairs, according to the village. It projects that motor fuel tax revenue, which historically has been the main source of money for street maintenance, will continue to decline.