The operating levy is the main source of property tax revenue for the Village. As stated above, this tax pays mostly for services such as police protection, trash and snow removal, street and park maintenance, etc. The levy comes before the voters every 5 years, and currently consists of 5 mils of voted millage with an effective millage rate of 4.75.
A property tax levy is typically passed to raise a specific amount of money. The millage rate is calculated by dividing the amount to be raised by the total value of the properties being taxed. When property values go up, the millage rate goes down so that the overall amount of revenue that the levy raises stays the same. The original rate is known as the voted millage, and the reduced rate is known as the effective millage. For example, when the Riverlea operating levy was last renewed in 2010, it raised just over $100,000 per year at 5 mils (an additional $50,000 or so is raised through unvoted millage). Due to the increase in property values since that time we're able to raise that amount at an effective rate of only 4.75 mils.
When a property tax levy expires it can either be renewed or replaced. A renewal levy keeps the effective millage rate in place, which means that the cost to property owners stay the same. A replacement levy applies the voted millage rate to current property values, which means that the cost to property owners goes up.
The tax issue on the ballot would replace, rather than renew, the existing operating levy, and add an additional 2.25 mils, for a total millage rate of 7.25. This is an increase of 2.5 mils over the current effective rate. Using the formula described on page 2, an increase of 2.5 mils means a tax increase of about $77 per $100,000 of assessed market value, or about $230 per year for a $300,000 home.
Over the last 10 years the Village has seen the elimination or reduction of several sources of revenue:
As the main source of revenue for the Village, the operating levy is essential in order to keep providing services to residents. If it were to fail, then our annual revenue would drop by more than half and we would be unable to pay our bills. We might be able to limp along for a year or so by spending the remaining general fund balance, but failure of the operating levy would effectively mean the end of Riverlea as a functioning municipality and a very uncertain future for Village residents.