City property taxes are expected to increase slightly in Highland next year.
The City Council on Monday approved an estimated tax levy of just over $3.64 million, up 2.85 percent from this year’s levy of $3.54 million. A tax levy is the amount of money a government entity — in this case, the city — can collect through local property taxes.
The city tax rate is expected to increase 1.81 percent from the current year’s. This year’s tax rate is just over $1.99 per $100 of assessed value. The projected rate for next year is nearly $2.03.
“The new rate should be pretty minor,” said Highland Finance Director Kelly Korte. “Taxpayers should be happy.”
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If the estimated levy and rate holds, a taxpayer with a home valued at $150,000 would pay the city about $21 more in property taxes next year.
For only the second time since 2009, the city is expecting an increase in assessed valuation. Highland’s assessed value was about $177.8 million for 2014. This was a .85 percent increase from the previous year’s $176.3 million assessed valuation.
For its estimated levy for next year, Korte said the city is taking a conservative approach, due to local economic conditions, and assuming a 1 percent increase in the assessed valuation from the prior year’s level.
City tax levies
The following is an explanation of all the city’s various estimated tax levies for next year. Tax rates are dollar amounts applied to equalized assessed value (EAV).
EAV is determined by taking 1/3 of a property’s market value and applying any multipliers to it.
Multipliers can be positive or negative and are determined by a revue at first the county and then the state level. They are used to make sure that assessments are fair across political boundaries, since many taxing districts may have territory in multiple cities, townships or counties.
GENERAL FUND TAX: The city has levied a rate of .333 which provides approximately $598,086 for the General Administration. With a referendum, the city could tax at a rate of .4375.
POLICE PROTECTION: The city’s statutory limit (without any referendum) of .075 should generate approximately $134,704 this year. This doesn’t begin to cover the $2.5 million Police Department budget.
FIRE PROTECTION: The city’s statutory limit (without any referendum) of .075 should generate approximately $134,704 this year.
COMMUNITY BUILDING & GYMNASIUMS: This gives the Community Buildings and Gymnasiums $134,704 per year with a tax rate at the statutory limit of .075.
PLAYGROUND AND RECREATION: Set by referendum at the rate of .09, this levy generates $161,645 annually for the Playground and Recreation Fund. These funds are used for the operation of the city’s playground and recreation programs.
COMFORT STATION TAX: This tax was started in 2007 and is used to upgrade existing restrooms and build additional restrooms in the various parks around Highland. Each building costs from $24,000 to $40,000 each. This levy will generate $25,000 for the comfort stations used by the city’s Parks and Recreation Department.
MUNICIPAL BAND: The rate of .0256, which could be increased to .04, generates $46,000 for the Municipal Band programs on the Square, as well as the Peanut Butter and Jam entertainment during the summer.
POLICE PENSION FUND: This fund is levied at a rate necessary to produce a sum sufficient to meet the city’s contributions as required by the Illinois Department of Insurance-Police Pension Division. Levied “to meet needs” at .245 and should generate $440,000 next year. This amount was estimated until the final amount is determined by the Department of Insurance and an independent actuary hired by the police pension board. These reports will be available by Nov. 30, 2015 and the final amount will then be included in the actual tax levy request.
SOCIAL SECURITY: The city’s Social Security needs for the general funds (non-enterprise) are met by this .2589 levy, generating $465,000. This levy has increased based on increases in taxable wages for the governmental funds.
MUNICIPAL AUDITING: This tax is levied at whatever rate is necessary to produce a sum sufficient to meet the general funds’ portion of the cost of the required audit. The city enterprise funds (Electric, FTTP, Water, and Sewer) will also help pay for the audit. Levied “to meets needs,” a tax rate of .0095 would generate $17,000 for the Audit Fund.
ILLINOIS MUNICIPAL RETIREMENT FUND (IMRF): Another “to meet needs” levy of .2756 pays $495,000 toward the city’s contribution for employee retirement. This figure includes IMRF payments for the general funds only and is based on the city contribution rate of 11.09 percent. Enterprise funds pay their own IMRF. This levy has increased based on increases in pensionable wages for the governmental funds that have been covered in the prior few years by excess cash in this fund.
INSURANCE AND TORT JUDGMENT (LIABILITY): Levied to meet anticipated insurance costs and to pay judgments or settlements, a rate of .1281 will generate $230,000 for liability and worker’s compensation insurance. The city must levy to cover its anticipated costs, plus maintain a three-month reserve of cash, which is required by the city’s financial policy.
SCHOOL CROSSING GUARD: Used to hire part-time school crossing guards. The city needs to levy .0070 to generate $12,500 for school crossing guards this year.
AMBULANCE: With this levy, Highland would contribute $444,585 to help cover the full-time ambulance service, with a projected tax rate at .2475. Highland-Pierron Fire District is to levy $110,875, Grantfork should levy $24,679, St. Jacob should levy $46,713, St. Rose will levy $25,155, and Marine should levy $71,181 as their share of the expenses.
LIBRARY (INSURANCE AND TORT JUDGMENT): December 2004 (for 2005 tax bills) was the first time the library levied this tax. It is used for safety issues at the library. The library has used this tax money to replace carpet that was held together with duct tape, along with other safety upgrades. The tax, levied at .0187, will provide $33,500 for the library as work continues to replace windows.
LIBRARY TAX: For the establishment and maintenance of a free public library. The only library revenue source the mayor and City Council control is levied at .15 and should generate $269,408. The Library Board is given the responsibility for administering the operation of the library.
BONDS: The city has sufficient revenue to meet the bond requirements for its 2014A KRC, 2014B Street, 2012 TIF, and 2013 Sewer Construction bonds, and therefore, these taxes were abated at the recent council meetings.
Calendar for Tax Levy
Oct. 19 City Council passed 2014A KRC Bonds, 2014B Street Bond, 2012 TIF Bonds and 2013 Sewer Construction Bond Sufficiency tax abatements.
Nov 16: City Council passed resolution approving the estimated tax levy.
Dec 7: Staff discussion with council about tax levy / passage of budget amendments needed for tax levy.
Dec 21: Council must pass tax levy ordinance.
Dec 29: Tax levy ordinance must be at the county clerk’s office.
Note: If the city’s final tax levy is more than 5 percent higher than last year’s, the city must have a truth in taxation hearing before the levy is approved. A notice of the hearing must be published in the newspaper seven to 14 days prior to the hearing date.