Formal discussion on property tax levy to begin in Urbana
URBANA — The city property tax rate would increase but homeowners, on average, would not be paying any more than they did last year under a plan that will be presented to Urbana City Council members on Tuesday.
Council members need to approve a property tax levy by December, and they will begin their formal discussion about it when they meet as the committee of the whole on Tuesday at 7 p.m. in the Urbana City Building, 400 S. Vine St.
As presented, the tax move is the same strategy city officials used last year when property values dropped but officials said they could not afford the decrease in property tax revenues. Under this year's plan, the city would collect the same total dollar amount that they collected from property owners last year.
But Comptroller Ron Eldridge estimates that property values will fall off an average of 2 percent throughout the city. That means the tax rate is expected to rise 2 percent to $1.3454 per $100 of equalized assessed value, even though homeowners, on average, would not pay any more than they paid this year.
The city would collect a total $7,710,681, the same amount it collected last year.
City officials in Champaign this year used the same strategy in setting their property tax rate. The tax levy stayed the same, but the tax rate is expected to jump about 1.5 percent to $1.3287.
Champaign city council members have already given preliminary support to those numbers and could finalize their approval when they meet on Tuesday at 7 p.m. in the Champaign City Building, 102 N. Neil St.
For the past several years, budgeters in both cities have been managing costs that continue to rise — particularly the cost of employee benefits — while revenues remain flat. In a memo to the city council, Eldridge said government finance officers predict that income tax revenues, a key city cash flow, will drop next year.
Other revenues are beginning to rebound during a slow economic recovery, but Eldridge said in the memo that they are not enough on their own.
"While sales tax is projected to increase 2.4%, this is a very modest increase, certainly not able to match our total expense increases nor make up for the drop in other areas," according to Eldridge's memo.