No property tax increase in Elgin’s $274.5M budget

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Updated: August 4, 2011 4:20PM

ELGIN — The Elgin City Council Wednesday adopted a $274.5 million budget for 2011, which is about 1 percent less than this year’s $277.1 million financial plan.

However, the city’s property tax rate for 2011 will remain the same as it has for the last 19 years in Elgin. And because property values have declined due to the national recession, that means a good many home­owners will be paying fewer dollars to the city.

It also means Elgin will take $2.248 million from other sources to fill that gap. That will come from about $1.7 million from its general revenue cash reserves and about $500,000 from an anticipated increase in sales tax dollars collected next year with new businesses opening in town, particularly Walmart and the Rosen Kia car dealership, Colleen Lavery, the city’s chief financial officer, said prior to the regular meeting.

With growth and housing values on the rise prior to the downturn two years ago, Elgin collected $36.1 million in 2010 property taxes. Next year, with property values in decline, staff anticipates Elgin will have $33.2 million available to it from property taxes.

In Kane County, the city of Elgin taxes homeowners $1.92 per $100 of assessed value, or $3,840 on a home assessed at $200,000 on a three-year rolling average value for the property. About 80 percent of the city’s housing stock is in Kane County. Lavery said the system is more complicated in Cook County, and though the rates may be higher, homes usually are assessed a lower value than comparable Kane County homes.

Lavery said she talked to the city’s bonding agencies, and the move will not impact the city’s bond rating. The city still will have 16 to 19 percent of its money in cash reserves, or enough to cover two months of expenses, she said.

Lavery said city council members realized that times are tough, unemployment still high, and that they didn’t want to burden residents by raising property taxes.

During the meeting, Councilman Rich Dunne stressed that other taxing bodies may increase their rates, which could impact total property tax bills for Elgin residents, but any increase will not be because of the city’s budget plan.

Mayor Ed Schock said the move to dip into reserves was a wise one, but cautioned that if property values continue to decline, the city may have to look at other options in the future.

This year’s budget process was less strenuous for the city than those of the two prior years, when staff cuts were made, pay rates frozen, festivals cut back or cancelled, and union and other concessions were made to keep Elgin in working financial order in the wake of the lingering recession.

Schock urged residents to be generous this holiday season and contribute what they can to such charities as the Salvation Army and the Larkin Home.