Oswego portion of tax bills should hold steady : News : Oswego Ledger-Sentinel : Hometown Newspaper for Oswego and Montgomery, Illinois
|Oswego portion of tax bills should hold steady|
|Board backs levy scenario that would result in 'negligible decrease'|
|by John Etheredge|
"A negligible decrease."
That's what Village of Oswego taxpayers should expect to see on the village portion of the tax bills they will receive in the mail next spring.
During a committee meeting last week, village board members voiced support for maintaining the village's current property tax levy of $1.2 million for next year.
Under state law, the board must adopt its annual levy before Dec. 31.
Mark Horton, village finance director, told board members that maintaining the tax levy at its current level for another year would result in the village's tax rate to increase .0069 cents, from this year's rate of .1560 cents to .1629 cents.
But the rate increase should be offset by an estimated drop of 4.2 percent on the total equalized assessed value (EAV) of all properties in the village, according to Horton.
In a memo to the board, Horton noted the end result would mean "taxpayers on average would notice a negligible decrease in the village portion of their taxes."
For years the village's tax rate has been among the lowest of any municipality in Kendall County.
According to Horton, the village portion of local tax bill accounts for just 1.5 percent of the total amount most people are charged.
Each spring officials at the Kendall County Treasurer's Office calculate individual tax bills by multiplying the total tax rate of all local governmental agencies times the EAV, minus any exemptions.
Under this year's tax rate of .1560 cents, the owner of a home valued at $200,000 that did not claim Homestead or any other exemptions would have paid $103.99 in property taxes to the village.
Steve Jones, village administrator, noted the village receives significantly more money each year in sales, utility and state-reimbursed income tax revenues.
The village has used property tax revenues each year to fund a required contribution to its police pension fund and to supplement contributions to the Illinois Municipal Retirement Fund (IMRF).
Maintaining the tax levy at its 2013 amount was among a group of five potential options concerning next year's levy that Horton presented to the board.
The other options were either to decrease or increase the levy. The board could increase the levy to cover the full cost of the police pension and IMRF contributions, or decrease the levy to an amount that would allow the village to maintain its current tax rate.
The board expressed differing views on the options.
Board member Scott Volpe said he favored the option that would allow the village to maintain it current tax rate because "it would allow the village portion of property taxes (bills) to decrease along with the decrease" most residents have seen in their EAV.
Volpe suggested revenues from other sources could offset a reduction in property tax revenue. He noted the village's financial report for August showed the village's sales tax, home rule sales tax and income taxes all showed increases when compared to August of 2012.
Board member Gail Johnson said she has concerns about the possibility the village might decrease the levy. She noted the state could one day reduce the amount of income tax money it reimburses to the village.
"The tax levy may look great for us this year, but I do worry we are handicapping future boards by continuing to decrease it. Yes, it sounds great to say, 'We are going to give you $3 to $7 back,' but truthfully to most people's pocketbooks that $3 to $7 isn't going to make that much difference," Johnson said, adding, "At what point we do need to start planning for the future? If development comes, and we've already seen the precursor to that, we are going to have roads to build. What are we going to do that with?"
Volpe said he believes property values will increase as the economy improves and, as a result, so will the village's total EAV.
In the event the state reduces its reimbursements to the village, Volpe said the village has built up a "healthy reserve, so if the state cuts our funds we can ride that out and then adjust the next year. We have lots of option for that."
Board member Terry Michels said he agreed with Volpe.
Michels added, "We provide a great value to the residents for a little amount of money that we collect. I don't know if the general public understands that unless they really look at their tax bill...they are getting a great deal with what we have right now."
Board member Pam Parr said she is concerned the village lacks a "long-range view of where we are going as a village."
She explained, "Even though the revenues have gone up, we have not done anything to encourage growth, either residential or commercial. I'm not sure we can continue to count on that. I'm not willing to risk future revenue streams for the cost of a latte. That's what we're talking about."
Do away with
village property tax?
In a related matter, the board instructed Jones to provide them with information-both positive and negative-concerning the possible elimination of the village's property tax levy.
Earlier during the meeting, Jones noted the village could potentially do away with its property tax levy by replacing it with revenues from an increased home rule sales tax or a gas tax.
The potential benefit of replacing the property tax levy with revenues from a sales or gas tax would be that a significant portion of the people who would pay the tax would live outside of the village as compared to the property tax, which is paid entirely by village residents, according to Jones.
When questioned by board members, Jones said out-of-town residents pay roughly 40 percent of all the sales taxes paid in the village.
However, Jones acknowledged there are "real pros and cons" concerning the possible elimination of the tax levy.
Board members agreed they want to hear more on both sides of the issue.
"I'd be interested in seeing it. But I don't go into it with high hopes," Michels said.
Board member Tony Giles said he "wouldn't mind seeing the other options, but added, "I'm not holding out any hope on raising the sales tax. I don't think that's the way we want to go."
Giles added, "I would rather ask the government to do the same with less than go to the individual homeowners (for more). So I would rather find more creative ways to not spend as much."
Johnson said she understood Giles' position, but added, "I don't believe you can do more with less. You can do different with less, but I don't think you can do the same or more with less. I think that is a fallacy with businesses. I've watched them struggle to try and do that. We're getting less for less."
Giles noted a few years ago amidst the recession the board trimmed "a couple of million dollars" out of the village's budget."
"You cut staff," Johnson said.