Temporary sales-tax hike will offset city projects, Highland Park says

Highland Park is set to raise its local sales tax for five years after the City Council approved the measure on Monday, Aug. 17. 

The city’s rate will climb 50%, from 1% to 1.5%, beginning in January 2027, with the additional revenue — forecasted at $3 million annually — intended to finance city projects through December 2031.

The increase would be “dedicated exclusively” to support capital projects, a City staff report says. Those, according to the city website, include improvements to business district infrastructure, streets, bridges, sidewalks, bike paths, water and sewer systems, facilities, public safety, and public works fleet and equipment. 

After five years, the sales tax will return back to 1%, per the approved measure.

The City has $40 million planned in capital costs in 2026 and $216 million as part of its 10-year capital plan. 

“The five-year period of the increase would allow us to generate a healthy amount of revenue that can be used for one of our greatest priorities, which is our infrastructure investment plan (a component of the City’s Capital Improvement plan),” City Manager Ghida Neukirch said.

Neukirch said that Highland Park works to have diversified revenue streams as part of its budget development process. She added that the city works diligently to keep property taxes as low as possible, and a sales tax bump is a way to avoid raising property taxes.

The City’s sales tax not only impacts residents, but also anyone coming into the community to spend money. 

The total sales tax in Highland Park is currently 8.25%, with 1% from the City, which was enacted with the city’s home-rule authority. 

“We will revisit the sales tax increase every year,” Neukirch said,.“But at least with the five-year mark, we go into it with the anticipation that we will eliminate the additional increase and go back to our 1%.”

Without the temporary increase, the City reportedly would consider changes to its capital plans, operations and staffing. 

Neukirch said the City is regularly looking at its budget for opportunities to be more efficient and fiscally responsible and adjusting the sales tax is one way to do that. 

The Record is a nonprofit, nonpartisan community newsroom that relies on reader support to fuel its independent local journalism.

Become a member of The Record to fund responsible news coverage for your community.

Already a member? You can make a tax-deductible donation at any time.