Tax levy likely to drop for sixth straight year in Vermilion County

DANVILLE — Several issues facing Vermilion County depend on what happens in the Nov. 6 general election, from who will be the next county board chairman to whether the county can officially entertain potential buyers for Vermilion Manor Nursing Home.

But one issue is fairly certain, even now.

The county board most likely will approve a property tax levy next month that, for the sixth consecutive year, will be slightly less than the previous year — $6.581 million compared with $6.588 million last year.

However, due to the decline in the county's equalized assessed valuation, the property tax rate is projected to increase, but only slightly, from $1.41 per $100 of assessed valuation to $1.44 per $100, according to the property tax proposal. But the rate won't be known for sure until the equalized assessed valuation is determined early next year.

The county board voted earlier this month to put the proposed tax levy and budget on public display for 30 days and will take a final vote on both at its Nov. 13 meeting. That vote will come one week after the general election that will affect many issues yet to be decided by the newly elected board, including its next chairman.

Currently, the 14 Democrats have a one-member advantage over the 13 Republicans. Historically, the chairman is elected from the ranks of the majority party, and with all 27 seats up for election and 15 of those seats contested, the majority could swing either way, over to the Republicans or it could stay with the Democrats.

Vermilion County Board Chairman Jim McMahon, D-District 9, said if the Democrats hang on to their slim majority and re-elect him chairman, he doesn't plan to change his conservative financial approach of the last six years, especially on the levy. He said he doesn't intend to increase this next property tax levy or future levies until the county's equalized assessed valuation begins to increase again.

The county's equalized assessed valuation has declined the last two years and is expected to again when the new numbers come out next spring, according to the county's levy projections.

In 2010, the county's equalized assessed valuation was $848.7 million; in 2011, it dropped to $819.4 million; and county officials are predicting $800 million for 2012.

To reduce the levy each year, the county has had to lower certain categories within the levy, including the general fund and the Illinois Municipal Retirement Fund, which funds employee pensions. The only category that has increased is the Public Safety Building rent fund. The portion of the levy was $3.76 million in 2011 and increased to $5 million last year and is proposed to be $5 million again this year. McMahon said that portion of the levy had to increase, because it funds the Public Building Commission, which recently took over the county's juvenile detention center that was struggling due to lack of funding from the state.

To achieve a decrease in the overall levy, a few other categories were decreased, including the general fund and IMRF.

In 2011, the levy generated about $2.1 million for the general fund and $1.57 million for IMRF, and the proposed levy for next year will generate $2 million for the general fund and $520,000 for IMRF.

Seven years ago, the county was considering a significant tax increase, partly to offset the state's request that the county significantly increase its funding to IMRF. At the time, the county was making a 3 percent contribution to IMRF, and the state recommended an 8.89 percent contribution, or about $1.2 million.

McMahon said that although the proposed levy would generate about $1 million less for the IMRF fund, the county is adequately funding its IMRF contribution, and the county is not, and will not, be in the same situation as the state in regard to its pensions.

One reason the county can reduce the IMRF part of the levy, he said, is employee cuts, mostly at the Vermilion County Health Department. That reduces the county's IMRF contribution. Plus, he said, the IMRF fund has a healthy balance, so the county is lowering that reserve. McMahon said the county's annual IMRF contribution is about $1.5 million a year, and the IMRF's audited fund balance is $1.78 million.

"Basically, the taxpayers have already pre-paid into IMRF, so now we can lower that fund balance," McMahon said. "So if you kept it at the same level as before, we would be creating more of a fund balance. Why ask (for it), if you don't need it?"

The county also anticipates about $50,000 less in property tax revenue for the general fund next year, but, McMahon said that fund also has a healthy balance. According to the most recent audit, that fund has $6.57 million.

Vermilion County Board member Mike Marron, R-District 2, said he supports spending some reserves, but the county needs a solid spending plan in place for the next several years, because he doesn't anticipate the state's situation improving anytime soon, and the economy could continue its sluggish pace.

"I'm not suggesting in any way there has been any irresponsible spending. I just want to make sure that we have a good plan in place moving forward," said Marron, adding that it's good the county has gone so long without increasing the property tax levy but wants to see a plan in place to ensure the county's not suddenly facing a dramatic tax increase or budget cuts in the future.

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