URBANA – A possible reduction in the city's property tax rate would cost about $86,000, according to the city comptroller.
Comptroller Ron Eldridge spoke during a hearing Monday on the city's property tax levy that reducing the tax rate from $1.312 per $100 of assessed valuation to $1.294 – matching the tax rate proposed in the city of Champaign.
His projections are that the city's extension would drop from $6.31 million to $6.23 million with the rate cut. That's based on estimated equalized assessed valuation of $481 million within the city.
The city last month set a maximum tax levy of $6.8 million, but city officials said later that they don't expect to collect nearly that much because the city uses a tax rate cap – it instructs the county clerk's office not to collect any more money than can be generated through its tax rate.
Without a rate cap, the city, which is home rule, could get virtually all the money it asks for.
Both Champaign and Urbana have set their levies to produce tax rates of $1.312 in recent years.
Mayor Laurel Prussing reiterated her intention Monday to ask for a tax rate matching the city of Champaign's rate. That would result in a 3.3 percent increase in city property taxes for the average Urbana home owner. Without the rate reduction, those homeowners could expect to see a 4.75 percent increase.
"I'll be recommending it be $1.29, which is not a huge decrease, but it is a decrease," Prussing said.
Several residents concerned about their tax bills showed up at Monday's hearing, which preceded the city council's committee of the whole meeting.
Richard Gault, 2521 St. Andrews Road, U, said people are reaching their limit in how much they can pay in property taxes.
"You need to understand where a lot of people are coming from," he said. "Not just in our town, but in Champaign, people are getting tired of having property be the source of generating new income."
Gault encouraged city officials to "go to state government and say we have to change how we do things."
Prussing said she worked for many years to do just that. She was a state representative from 1992 to 1994.
Alderman Charlie Smyth, D-Ward 1, said the city needs income increases every year because it is being squeezed by increases in employee health care, up 8 percent to 10 percent, and pension costs, up 10 percent to 12 percent.
"We're being squeezed between Springfield and their unfunded mandates and rising costs like everybody else," he said.