Evanston’s property tax levy has soared 56 percent in the past decade, while the median household income in Illinois has grown only about 15 percent.

Evanston’s property tax levy has soared 56 percent in the past decade, while the median household income in Illinois has grown only about 15 percent.

During the decade the annual increase in incomes has only exceeded the increase in property taxes in two years. Income data for 2010 is not yet available from the Census Bureau.

We had hoped to be able to use income data for Evanston residents alone for this comparison. But except for decennial census years, the Evanston data varies wildly in Census Bureau estimates because of an extremely small sample size, and it’s only available as a three year average with data series starting in 2005.

Using the Evanston data for 2005-07 shows a 12.5 percent cumulative income increase since 2000 — less than for the state as a whole. But the 2006-08 estimate for Evanston, the most recent available, shows a 28.6 percent cumulative increase since 2000 — nearly double the state increase, but still well below the increase in the city’s tax levy.

The proposed city budget for 2011 submitted by the city manager calls for a 4.2 percent increase in the tax levy, while economic forecasts raise doubts that local workers will see pay increases anywhere near that large next year.

And that 4.2 percent increase is reached only after closing a budget gap of over $3 million through a combination of layoffs and increases in other city taxes and fees.

Related story

City tax hikes run double the rate of inflation

Related data

Data sources and spreadsheet calculations used for this story

Bill Smith is the editor and publisher of Evanston Now.

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14 Comments

  1. Diversity in Evanston

    If this is true, and the trend continues, there is no way this city can remain diverse. It also does not bode well for the foreclosure trend. Without incomes that keep pace with expenses, families cannot dig out of any recession created hole.

  2. Important Tax Information the City Council ignores

    Thank you providing the citizens of Evanston the charts on City tax hikes v. Inflation and City tax hikes v. Income Growth.  Most Evanstonians felt the impact of the steadliy growing tax bite the city imposed on the citizens.  Now that these tax inreases are compared to inflation and income growth rates, the real impact is seen.  The reflexive tax increases over the years is devistating to the civic life in Evanston.  It lowers the quality city services and delayed an put off needed road repairs and other constuction. It has even indirectly impacted the schools.  If the charts showed the tax hikes with all of the fee inreases the differences between income and inflation would be even greater.  The City Council is imperious in their need to always raise taxes and fees without making the tough decisions to cut services and stand up to the unions.  Please read David Brooks op-ed piece in the NYT: http://www.nytimes.com/2010/10/12/opinion/12brooks.html?_r=1&ref=davidbrooks

     

     

  3. The City’s portion or the entire property tax bill?

    Because there are so many line items on our property tax bills, it is important to know what "Evanston tax levy" means.  Obviously, D65 and D202 (and Cook Co.) have a big influence on our final bill. Or, are the figures about the City’s total revenue, i.e. including sales tax revenue (which includes tax paid by outsiders who shop and dine in Evanston) or just the property tax levy?

    The charts and graphs are interesting, but I need to know exactly what I’m looking at.

     

    1. Just the city levy, just the property tax

       Hi John,

      When an Evanston Now story talks about the city’s tax levy or the city’s budget we’re always talking about just the city’s tax levy not the schools or any other taxing body. If we’re talking about something else, we’ll say that.

      When we talk about the property tax levy we’re not talking about sales tax revenue or any other revenue source.

      I’m not sure why you were confused, but hope this clears it up.

      — Bill

      1. Source of data?

        Bill,

        I’m confused because I thought the 2009-2010 City budget had no increase in the property tax rate, yet your graph shows a positive gain. What exactly are you calculating the percentage increases from? Your graphs/story do not list your sources of data.

        If the increase is due to property value increases, then a comparison to income gains is somewhat misleading, since the City’s gains are based on personal wealth gains, i.e. the rise in property value. Likewise, the future points on your graphs, say 2010-11, would be more dramatic, given the fall in personal wealth, i.e. the decline in property values.

        I’m also confused about the role of expiring TIF districts, as the property tax from the improved properties starts to flow into general funds, rather than a separate trust fund. So, it can seem that the City’s levy is increasing when really money is being shifted from one pocket to another, but your graph only shows the increases in one pocket. Again, it would help to know from what data the percentages are calculated.

        Sorry for the confusion.

        John

        1. Data, data, everywhere

          Hi John,

          The city budget calls for no increase in the general fund portion of the property tax levy — but it calls for a big increase in the the public safety pensions portion and a smaller increase in the debt service portion.

          Those increases were reported by Evanston Now in a story back on Oct. 1.

          I’ve now had time to make the underlying data calculations and data source information for the charts used in this week’s stories look a little more presentable, and you can find it in spreadsheet form here.

          And we’re looking at the cost of government services here. The cost burden is going up faster than the general rate of inflation and faster than people’s incomes are increasing. At mid-decade that cost burden was being spread across a slightly larger pool of people as the city’s population rose — but with the foreclosure crisis, housing unit vacancy levels are rising and the population has likely started to drop from its mid-decade peak. (We’ll know a lot more about that when the new census data is released early next year.)

          Regarding your second paragraph, the increases shown have nothing to do with property values. We are looking at the amount of money that must be raised from the property tax — not at the value of the properties against which the tax is being levied.

          Assuming the change in your property’s value is due to broad market forces that are affecting all your neighbors as well as you — as has been the case in recent years — it makes not a lick of difference for this calculation whether values have risen or declined — the revenue that must be generated from the property tax is not affected by that. Only the tax rate required to generate that revenue changes.

          Moving on to your third paragraph, a TIF lets the city capture 100 percent of the incremental increase in the value of property within the TIF district, put that revenue in a special fund separate from the general fund and spend that money in ways designed to stimulate further economic development in the TIF district.

          When the TIF expires, the city loses that revenue flow and a proportionate share of the revenue in subsequent years becomes available to all the taxing districts in the community. The city’s share then becomes about 20 percent of the total — with the school districts getting the bulk of the rest.

          Annual revenue to the city from the Washington National TIF was running about $3.4 million a year toward the end of its life. (See this budget workshop document).

          With the TIF now gone, that means a bump of about 20 percent of that amount — or about $680,000 — to the amount that a given property tax rate would raise for the city. Since the city has been raising roughly $40 million a year from its property tax levies … that’s an increase of about 1.7 percent.

          So, you could argue that after adjusting for the TIF, the city’s property tax levy has only gone up 54 percent instead of 56 percent during the last decade.

          But then you have to think about whether losing the $3.4 million in special-purpose TIF revenue means the city has to raise other taxes to fund similar development work in the future — like building parking garages and paying for repairs to them.

          In the overall scheme of things, the expiration of a TIF doesn’t make a big difference in the tax burden on property tax payers. And remember that the Washington National TIF had by far the biggest run up of property values any of the city’s TIFs have seen so far.

          — Bill

  4. CIty Employees Compensation

    It appears that the compensation of City Employees has grown at a much higher rate than that of the taxpayers who pay their salaries.  Either that, or there are simply more City Employees per capita.  Or both.

    1. Counts and compensation

      The count of city employees increased substantially between 2000 and 2007, as we reported a couple years ago — from 838 to 884 full-time equivalent workers. Since then the count has dropped to a level of just under 800 full-time equivalent employees now.

      Compensation has been increasing faster for city employees than the household income of the typical taxpayer. However, most city workers got no pay increase this year and are scheduled to get pay a increase of 2 to 2.5 percent next year.

      The biggest increase in their compensation costs has been in pension and health care costs, not in actual take-home pay.

      — Bill

      1. Benefits

        Thanks, Bill.

        I’m not so much interested in pure take-home pay, which is a very misleading figure.  I am interested in the total compensation package- Wages, insurance, pension and all other benefits and perks.  The City outlays for worker benefits and pension costs is the fastest-rising portion of the public employee compensation picture.  It is also the most rapidly shrinking part of the compensation package for the private sector employees (who are the taxpayers that foot the bill for the Public Employees).

        The growing disparity in compensation between public sector employees and private sector employees is alarming and needs to stop.

      2. Tax Hike & 2 – 2.5% Raise for City Employees

        For the past four years I have been working in the public sector for a very successful company that posts gains every quarter – even during the downturn.  During all of the time of this success, I received one miniscule raise and that was over 3 years ago.  Further, for the past two years, I have been forced to take a pay haircut.  I’m not happy that my income has gone down and our city employees, poor souls (sarcasm), have had to skip one year of raises.  I am seriously in favor of outsourcing city hall jobs to save taxpayers some revenue.  Outsourcing would have a major impact on our pension issue and, if threatened with outsourcing, the unions might finally agree to have meaningful discussions.

    1. Why taxes are being raised?

       Hi Ronaldo,

      That’s a deep question.

      The simplest answer is "because they can." There is no state-imposed cap on tax rates levied by home-rule municipalities like Evanston. The school districts, by contrast, do have to operate within a tax cap.

      Perhaps others would like to suggest other reasons.

      — Bill

    2. Response to “Why are taxes being raised?”

      Because many of our alderman have pet projects that they refuse to take off of the table.  Residents should put in a few well-placed calls to their alderman and tell them to make some meaningful cuts instead of raising taxes and adding fees.  We also need to demand they take on the unions.

  5. Wht is the really issue here with the tax levy?

    Bill

    What is interesting is the gap between the median house hold income and tax levy is widening. It is itneresting with even all the lay offs this has not shrink.   One has to assume Wally is not getting the structural budget problem solved?

    While I give Wally high marks for doing  something – some of  the management staff and council clearly are not on board. 

    a few examples

    Why wasn’t the entire waste operation privatized?  Interestly enough they are raising more fees again – transfer tax and the yard waste bag sales fell short.

    Water department – no real business model – council members are clueless to this.

    No control on capital project – management tools are no existent to keep tags on the enitire program all Wally is doing is shuting it down – by claiming we spend too much.

    The above are major examples of waste and mismanagement – but council members worry about $400,000 on branch librairies – the recent tribune article on the pensions of four employees for 1.2 million extra tax payer dollars was very interesting.

    Unforunately – more than four employees retired – about 30 – so the number is even larger.

    What about the million dollars a year in employee credit card charges! to me there appears to be little control of this mess.

    City operation are really not that expensive – the problem witht the staff and aldermanic mismanagement – that is were the really problem lies!!!

     

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