Skokie discusses hiking, expanding entertainment tax in early budget review

As Skokie staff and trustees meet this month to review their budget for fiscal year 2027, officials have recommended raising the local entertainment tax to fund a new ambulance and improvements to the village’s development services. 

The proposed tax hike, which trustees would have to approve by an ordinance separate from the budget, would raise Skokie’s entertainment tax from 2% to 5% and apply it to digital streaming services like Netflix and Spotify, which currently go untaxed in the village. 

Finance Director Julian Prendi estimated the hike would bring in $1.01 million in additional annual revenue. Funds would be remitted by streaming providers directly to the village and otherwise collected from ticket sales to movies, comedy shows, speeches and other events in Skokie. 

The official outline for Skokie’s fiscal year 2027 shows the village’s proposed general fund budget of $77.94 million is 3.18% larger than last year and balanced. 

Staff, however, outlined two “strategic enhancements” they would like to improve. 

According to the report, emergency medical service incidents in Skokie have increased by about 10% over the past five years, and continuing residential development is expected to further increase demand for EMS services, which all puts pressure on the Skokie Fire Department. 

In order to “maintain service levels and adequate response capacity,” the fire department recommended the village add a fourth ambulance to its fleet that can be deployed during peak call periods of 8 a.m. to 6 p.m. on weekdays. 

Speaking on April 13 during the board’s first of four budget hearings, Village Manager John Lockerby said calls frequently overlap during that period, and it would be more cost effective to purchase the $493,000 ambulance and operate it via $225,000-worth of overtime rather than hiring additional employees to staff the ambulance 24 hours a day, seven days a week.

The village also hired outside consultants to review Skokie’s development services, and after gathering input from staff, residents and contractors, they recommended the village streamline and enhance various processes, such as the village’s permitting and code enforcement, Lockerby said. 

Improving Skokie’s development services, which may require adding more staff, would cost $300,000 to $350,000 a year, Lockerby estimated. 

A 5% entertainment tax would still be lower than the average entertainment tax rate of 5.38% for area municipalities, a number of which, like Chicago, already tax streaming services, Prendi said. 

He added that the new revenue source should have a “fairly small impact to the end user” and a conservative estimate shows families pay $60 a month for streaming services. As more people shift away from cable television, franchise fee revenues have reportedly declined in Skokie. 

A first reading on whether the trustees will increase Skokie’s entertainment tax has not yet been scheduled and would likely take place after the fiscal year 2027 budget is approved in June. The board has two more public budget hearings scheduled — April 21 and 27.

Other budget takeaways

Lockeby attributed the expected 3.18% increase to Skokie’s operating fund to a nearly 20% increase in village employee health insurance expenses, which now annually cost about $1.5 million. Lockeby said staff’s hope this was an “anomalous” shock driven by market trends and won’t repeat next year. 

The budget report also noted that the replacement of lead water service lines — 668 of which Skokie must replace each year — was a “significant unfunded federal and state mandate” impacting the village’s fiscal year 2027 budget. 

Lockeby said the village will hire six new positions in its Public Works Department for the cost of $509,000 to help replace those lead lines. 

Other big ticket items allocated for fiscal year 2027 include $3.7 million to resurface three miles of streets, $275,000 for a water transmission study, $200,000 to upgrade its emergency dispatch and 911 system, and $70,000 to evaluate and create a village accessibility plan.

Notably, an overwhelming portion of Skokie’s general fund for fiscal year 2027 — $32.25 million, or about 41% — came from the village’s sales and use tax. 

Skokie’s revenue from monthly sales tax was lower in 2023-2024 compared to 2021-2022, but village staff were surprised to see that revenue jump in 2025, something that Prendi attributed to the Trump administration’s changes to the federal government’s tariffs. 

“Based on that trend last year, we anticipated a fiscal ’26 year budget that was strapped,” Prendi said. “And then we were shocked in 2025 when that trend started dipping upward, which can only be explainable by the tremendous increase in pricing thanks to the tariff policy.”

Prendi noted that, while the U.S. Supreme Court later ruled those tariff changes illegal, the federal government would have to refund that revenue, not a local municipality. 

The board voted in December to raise property taxes, ending a 35-year freeze to respond in part to a looming deficit. Prendi outlined on April 13 that if current conditions and projections hold, Skokie’s general fund balance will dip annually and hit a deficit in fiscal year 2035.

Skokie staff proposed other measures, like increasing the cost of car stickers by $10 and increasing the water fund rate by 14.9%, which would add $1.39 to bills per 100 cubic feet. 

Trustee Gail Schechter and Mayor Ann Tennes, however, both said they’d like to see more incremental increases on costs to residents and would like to discuss raising the cost of village stickers next year instead. 

Trustee Lissa Levy said she’d like the board to eventually discuss increasing trustee compensation in part so more people can afford to sever Village Hall. Assistant Corporation Counsel Barbara Mangler said the board would have to pass an ordinance ahead of the next election. 

Though no towns do it, Tennes said she’d eventually like to see all commissioners of Skokie’s advisory boards receive compensation, as only five boards currently receive stipends.

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