Slightly higher property-tax rate for 2013 recommended in Champaign
CHAMPAIGN — City administrators this week will recommend that the city council adopt a slightly higher property-tax rate for 2013 to compensate for another drop in property values citywide, but homeowners on average would pay the same as they did this year.
City council members will meet in a study session at 7 p.m. Tuesday in the Champaign City Building, 102 N. Neil St., to begin discussing next year's property-tax rate, which they will have to finalize before the end of December.
Officials estimate that the city's total property value will be assessed at just over $1.5 billion, which would be a 1.53 percent drop from this year's values, according to city documents.
If the council were to maintain the same property-tax rate that homeowners paid this year, it would mean about $300,000 less in tax revenues for next year's budget.
City officials typically use the property-tax rate as a guide, but legislators actually vote not on the rate itself but on a tax levy, which is the total dollar amount to be collected.
Administrators are recommending that they adopt the same tax levy as they did last year, $19,955,632. That means property owners, on average, could expect to pay the same dollar amount in 2013 that they did in 2012.
But because property values dropped, the tax rate would rise from $1.3084 to $1.3287 per $100 of equalized assessed value.
Alternatively, the owner of a $150,000 home would pay about $9 less in 2013 if council members stuck with the lower rate that property owners paid in 2012.
It is the same strategy that city officials used last year when they were dealing with an estimated 2 percent drop in property values. The tax rate at that time was $1.2942 per $100 of equalized assessed value, but the tax levy still has not changed.
Maintaining last year's tax levy — and consequently adopting the $1.3287 rate — is the recommended action among several alternatives that administrators will present to city council members.
Another of those options would be to maintain this year's property-tax rate, which would result in a $300,000 reduction in the tax levy, according to a memo to the city council.
A last option is to increase the tax levy to $20,108,672, which would also increase the tax rate.