Preliminary decision expected on Champaign property-tax rate
CHAMPAIGN — City council members this week are scheduled to make a preliminary decision on property taxes payable in 2012 as budgeters predict officials will need to close a $915,000 gap next year.
The city council will discuss the tax rate when it meets at 7 p.m. Tuesday in the Champaign City Building, 102 N. Neil St.
For the past four years, the city of Champaign has adopted a property tax rate of $1.2942 per $100 of equalized assessed value. That number is the same as the city of Urbana's.
This year, council members will be presented with more options. Budgeters are predicting that property values have decreased by 2 percent since last year, which would mean the property tax levy would drop by just over $400,000. It would also mean the owner of a median-priced home would pay $12 less in city property taxes next year, according to city documents.
While the actual dollar amount collected would drop with the same tax rate, the amount the city pays into employee pensions and capital improvements would increase, according to city policy. Budgeters would expect to have $727,614 less to pay for general city services.
City council members will consider maintaining last year's tax rate, identified in a memo as "option A." They will also hear a presentation on two more options, both of which would require that they raise the rate.
Under "option B," they could choose to adopt a tax levy equal to last year's. That would mean homeowners, on average, would pay close to what they paid last year, and the city budget would take less of a hit. But it would also mean the tax rate would rise; even though property values have dropped, the city property tax bill would not.
"Option C" would maintain revenues equal to last year's for the Champaign Public Library, and it means city officials would have to adopt a tax levy $131,368 greater than last year's. Like "option B," that means the tax rate would rise, but under this scenario, owners of a median-priced home would pay, on average, $4 more in 2012.
The discussion on property taxes will precede a discussion on next year's budget strategy. Budgeters are forecasting a $915,000 deficit before they act to close the gap for next fiscal year, which begins in July 2012. That is on top of the total $10.9 million in budget cuts officials have made in recent years.
City administrators will recommend that the council start thinking about $350,000 in more budget cuts and $565,000 in new revenue to close the gap.
The council is also set to begin deliberations on a new 4-cent-per-gallon motor fuels tax to help pay for road improvements. City officials estimate they have a $60 million backlog of unfunded road projects, according to city documents. They expect the gas tax could generate $1.5 million in new revenue and help them begin to chip away at the deficit.