Tax and income

Evanston’s property tax levy increased nearly 25 percent between 2000 and 2005, while the median income of Evanston households rose less than 5 percent.

The tax levy’s rise slowed during the current fiscal year, to just 2.9 percent, but the budget the City Council is now considering would impose a much steeper 5.5 percent increase.

U.S. Census Bureau data shows that the median income of an Evanston household rose from $56,335 in 2000 to $58,940 in 2005, a gain of just 4.6 percent.

Households that include a married couple did much better than non-family households. The married couples saw their median income rise 5.6 percent to $102,474 while non-family households suffered a 3.2 percent decline in income to $36,381 during the five-year period.

Median income represents the midpoint in a distribution of all reported incomes.

Because economic trends in recent years have tended to favor people at the upper end of the income distribution, the mean income — total income divided by the number of households — has gone up more. But even mean household income for Evanston residents is up only 10.1 percent for the five-year period.

It’s unclear what impact new construction has had on the tax burden of the typical household. City officials say 1,445 new housing units were built in Evanston from 2000 to 2006. Since the census says Evanston had 29,675 households in 2000, that suggests about 5 percent more households to spread the tax burden across — and a tax increase for the typical household of 20 percent rather than 25 percent over the five years.

But the census says the number of households in Evanston actually declined by 8 percent from 2000 to 2005 — perhaps in part the result of families doubling up to deal with increases in taxes and other expenses.

The city faces a cost crunch dealing with underfunded pensions for public safety workers and the city manager has proposed various cuts, including laying off nearly 2 percent of the city’s workforce to limit the tax increase to 5.5 percent.

Most participants in an Evanston Now poll have said they think the tax increase is too high. What do you think? Login and post your comments here.

Bill Smith is the editor and publisher of Evanston Now.

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1 Comment

  1. Taxpayers Cannot Afford Tax Increase
    I strongly believe people should make the time to educate themselves about Evanston’s budget. For each of the years’ between 2000 and 2005, I have participated fully in the Budget Process. Thank goodness Gerald Gordon continues to show up, and God Bless Dick Stillerman for all of his wisdom and many years of participation. I miss him and his regular contribution to the annual budget discussions.

    I like the way you laid out the obvious disparity between what it costs taxpayers’ to live in Evanston vs. what they can afford. A few key points to keep in mind when considering the Budget:

    Residential taxpayers’ pay a disproportionate amount of taxes into the coffers when compared to commercial districts and large portions of the community that contribute no tax dollars, in perpetuity. Residents’ want and need services. One example: In Evanston, we have recently spent lots of money to build shiny new fire stations, which we need. The proposed Capital Budget includes 2,700,000 for Station #5. State of the art life safety services are something we should expect. Where do we get the money? The Capital Fund. So where does that money come from? We borrow it.

    Evanston has refinanced bonds and increased our debt limit to the point where our Aaa bond rating is now in jeopardy. Beginning in 2003, Evanston has incrementally increased its debt limit to 100 million dollars. We have been issuing 12,000,000 in bonds annually for the last 5 years for a total of over 60 million, for capital improvements. This has increased our debt service by 4% annually. This Debt is paid solely by property taxes. These risks were made known to the public by activists, like me, who protested the financing scheme.
    Just like a credit card, eventually you hit the ceiling. You can only absorb a certain amount of debt before you can’t afford to borrow anymore, and the credit reporting agencies take note.
    TIFs have had an impact on Evanston’s finances as well. The problem is that they have been rolled together, and extended so that “pay day” continues to be down the road a few years. It doesn’t help that in our dwindling commercial district, where 1800 Sherman was built, we can no longer count on revenue from that building, just as “pay day” approaches, due to its consumption by the large not-for-profit (Northwestern University).

    Evanston has many capital needs and little means to pay for them.

    -Mimi Peterson

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