As Evanston Now reported last week, the Evanston City Council has compiled a record over the past decade of repeatedly making the city less affordable for homeowners by raising property taxes faster than increases in either incomes or inflation.

City Manager Wally Bobkiewicz’s proposed budget for 2011 doesn’t go far enough to end that bad habit. Despite calling for some layoffs and other cost-cutting measures, it still would result in an increase of about 4.2 percent in the city’s total property tax levy at a time when the consumer price index is rising at less than half that pace.

Evanston Now believes the property tax increase should be reduced to no more than 2 percent. That means paring roughly an additional $1 million from the city’s spending plans, beyond what the city manager is calling for.

It’s also important for residents monitoring the City Council’s budget behavior to recognize that the city’s government is a complex system with many opportunities to play cost-shifting shell games.

The city has many revenue streams beyond the property tax. It also has many different functions — some of which are most logically supported by consumption-based user fees, and others which can only be paid for from general tax revenue.

Focusing solely on the property tax levy can lead to distortions in which other taxes are raised inappropriately or service fees are hiked to cover more than the services they’re actually meant to pay for.

But the tax levy is an important place to start in assessing whether the City Council is properly doing its job of keeping city spending under control so that Evanston can remain affordable for its diverse community of residents.

The City Council holds its first discussion session on the budget at 9 a.m. Saturday morning.

What do you think?

You can contact your alderman to share your views on the budget. Contact information for each of them is available online.

You can also vote in our poll on the property tax and post your comments below.

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City tax hikes run double the rate of inflation

Bill Smith is the editor and publisher of Evanston Now.

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13 Comments

  1. Yes, Please STOP Making Evanston Unaffordable

    Dear Bill Smith / Evanston Now,

    Thank you for your timely editorial.  Lately I too have been pondering this question…  I am lifetime resident and also a 23 year rental property owner/manager in SE Evanston.  Over these years, and most notably the last 10 (years) I have watched my costs rise precipitiously and have not been able to increase my income accordingly to make my investment / retirment vehicle "business" work for me.  (If I didn’t do almost all the work, I would certainly not be able to continue to own these properties)…

    For example, the property taxes at my next door rental units have risen from $3400 to more than $13,000 since 1997 – nearly 400% (only God knows what it will be this year – conveniently arriving after the elections in 2 weeks). This year, due to a very sluggish economy, weak financial markets, record foreclosures and general trepidation of/by qualified renters, I have lost thousands of dollars of income on these rentals alone.  These are high quality rentals that are near public transportation, shops, and not far from Evanston’s beautiful lakefront.

    While I have watched the market value of my properties erode more than 20%, I have been forced to reduce the rental prices meaningfully…(too bad our assessor doesn’t see it that way). Right now, I have a beautiful 3 bedroom cottage with with all the amenities including a pet friendly private yard and parking included – I just dropped the rent $200/month…the phone’s not ringing – Any takers?  (prospects – I’m in the book, call me!)

    While I have had to slash my rents 15%, my costs are up an average of 22% – I wish to publically ask our Civic leaders: How long do they think I can "eat" this kind of situation?

    Hoping for change and realistic numbers from Cook County and the City of Evanston…please get real!

    Thanks for your attention.  Respectfully, Brian Becharas

    1. NU Grads in Evanston—for how long ?

        I have a question in for NU Community Relations to try to find out how many NU grads live in Evanston.  I think I saw the number years ago but don’t recall what they were like.

        Given the problems Evanston faces and the government bodies not willing to face-up to the problems of budget cuts and necessary tax reductions, I suspect we will see fewer and fewer NU grads choosing to live in Evanston—-esp. those like Kellogg, Law and Medical who make good incomes and can select Wilmette and other northern suburbs.  I’d asked an Asian NU prof. I know about the demographics in Evanston and why the census and other reports seemed so low for Asians and the schools use that and other excuses not to breakout Asian scores.  He said it is well known in his department that Evanston is too expensive for what you get, too much  crime and an outlook that is poor.  He thus just moved from Evanston to Northbrook—despite a much longer commute.

        On the other end of the scale, despite having gone to NU, a number of fields of study do not pay very well and students looking for jobs in those fields—or any other work—will not make the money to live in Evanston.   I assume a number of the store clerks, waiters and others are NU musics, drama, journalism, etc. waiting for ‘their break.’  Evanston is an expensive place to ‘wait in.’

       

       

  2. Raising everything

    I am surprised that people are complaining about raising everything — after all, Evanston has a Democratic regime and this is the way the Democrats do things. Watch out Nov 2! Things hopefully will change.

  3. As another property owner in

    As another property owner in Evanston, one of my biggest fear is that other potential and future property buyers (ones I am hoping to sell my property soon) do more research into how Evanston operates and finds Evanstonnow.com and reads about some of these stories and editorials published online.

    If you were potential property buyer in this city (for living or investment) and read this kind of editorial and other real stories out there about government mismanagement and injustice, why would you want to pay a dime to buy anything in Evanston?

    I definitely see more and more multi unit properties on sale and most of the owners who are selling due to being fed up like Brian Becharas is. 

    This kind of trend can have horrible consequences for already fragile economy of Evanston.  If more potential buyers know how city operates, it will cause them to not buy and prices to go down.  Which lowers the property values, tax transfers, and property tax that city collects!  I know property owners who do not live in Evanston do not vote, but we do pay lots of our shares of taxes in Evanston and we are being treated like second class citizens.

    Multi unit property owners are facing more stress in Evanston.  And my reason for this is that it is function of people who are overstaffed and overpaid at builings department trying to justify their job position and being part of overly inflated Evanston budget.  I believe someone mentioned that Evanston tried to outsource buildings division to other cities in the area and the bid was rejected.  This should suggest that we need to trim the fat in that area.  

    That is one area where it is not critical enough to cut for a year or two.  If there are more problems that comes because of that, they can always hire and spend more in the future budget.  We cannot do the samething for things like fire or police.   

  4. It’s time for a change – vote out all our elected officials

    The City of Evanston, D65 and D202 have sat idly by in a Recession for three years – 2007-2010 – before making any cuts to staff.

    And still every year, including this year, these government entities will raise taxes and fees.

    What Evanstonians don’t realize is that many of the foreclosures, especially in the Fifth Ward, are due in part to rising taxes and a shockingly massive decline in property values. My guess is that the hundreds of homeowners who lost their properties so far could not keep up with the rising taxes.

    It seems that the county assessor’s market value numbers are not keeping up with the current property values since we pay taxes in arrears and the county assessor must determine the assessed market value the previous year.

    The City Council just two years ago gave themselves a 20 percent raise. The D65 Board during a severe economic crisis is now flirting with building a new elementary school at a cost of $14-20 million, plus the added cost of hiring new staff. 

    I say we send all of these elected officials to the unemployment line in the next local election, and get some fiscal conservatives in there so we can balance the budget and not burden taxpayers.

     

  5. Silly repetitive anti-tax stories

    Anyone who thinks Evanston is poorly managed hasn’t seen the rest of America.  I think I get a great deal on my property taxes.   If I can comfortably own my own home in Evanston on a graduate student’s salary, I cannot help but conclude that people complaining that Evanston’s property taxes are becoming unaffordable have made some poor financial decisons of their own – maybe buying one of those enormous lakefront houses during the bubble was a poor choice.

    Always remember that the city spends most of those tax dollars hear in Evanston, and it provides services you could be using.  It’s getting old to hear the whining over and over on the front page of Evanston Now.

     

    1. i agree

       i also believe that our taxes are worth every penny, especially since our kids are receiving  fabulous educations in the evanston public schools.  

  6. Index to wages, not inflation

    CPI is effectively a measure of inflation.  Real wages tend to rise faster than inflation, which (normally) reflects a growing economy.  It’s more accurate to use the BLS national average wage index, much as Social Security does.  See http://www.ssa.gov/OACT/COLA/AWI.html for specific amounts.

    That said, the wage index declined roughly 3% last year for the first time in almost 60 years, so in this economy any increase is a sham.

  7. Taxes will continue to outpace inflation in the future

    Our taxes will continue to rise at a faster rate than inflation…this should not be a surprise. Just look at our 3 largest taxing bodies, Evanston City Government, District 202, and District 65 – As service related organizations, their highest expense item is labor. Look at the most recent labor contracts for District 202 and District 65 – both contain labor cost increases far in excess of inflation. Next look at the pension system and benefits granted for all government employees. I believe all pensioners have guaranteed 3% Cost of Living Adjustments annually (even if inflation as measured by CPI is lower)  Our pension system allows government workers to retire at relatively young ages and collect guaranteed and generous benefits. One example is the former Fire Superintendent in Evanston, Alan Berkowsky, who retired in May 2010 at the age of 51 years old, and will receive almost $100,000 per year in salary, plus generous benefits, plus a 3% annual increase in his retirement salary. Now consider the Pension spiking that occured for 4 senior level City of Evanston Administrators that the Chicago Tribune claims boosted their pensions by 15-31% and will cost Evanston taxpayers an extra $1.2 mm in payments to the IMRF. More grim news comes out of Springfield at the state level. Given the state’s dire fiscal situation be prepared for higher taxes and/or more borrowing coming from Springfield. All of these issues make Evanston increasingly unaffordable for many people. However, until people wake up to these facts, and are willing to hold our elected officials at the local and state levels accountable, NOTHING will change. (Except that your taxes will go higher)

  8. Thank you Evanston Now – Great idea for 2% tax cap

    Without tax increase caps, no amount will be enough.  It’s human nature to grab as many dollars as possible and say yes to everyone.  The only way things will get under control if the money is not there.

  9. Schools are the biggest part of our property tax bill

    Thank you Bill for bringing this issue forward. 

    I am all in favor of holding the line on our taxes to keep Evanston affordable.  But we need to be looking at the entire tax picture; not just a small piece.  Over and over, the only focus on taxes seems to be on the City Government side of the equation.  Our 2 school districts represent the largest majority of our taxes by a large margin.  The 2 school districts represent 65% of my  property taxes.  The city’s portion is only 22%.  And yet, all of the discussion continues to focus on the 22%, with virtually no discussion of the other taxing bodies, especially the largest being Districts 65 and 202.  Yet, year over year, nobody ever really discusses this.  Why not?  I believe it is because the teachers union is too strong in this state and many elected officials are given large campaign donations by the teachers union.  When people think ‘taxes’ they always immediately think of city government.  The school districts must be happy to keep the ‘tax’ focus on the City government.  This is misguided if we are going to really begin to do something about affordablility in this City, then we must include the 2 school districts in the tax discussions.  The aldermen and alderwomen would be wise to pull  the 2 school boards and school administrations into the budget discussions.  We have to view the taxes wholistically, otherwise as hard as the City works, the teachers union contracts can and will undermine all of that effort.  I think the citizens should start demanding more collaboration between the city government and Districts 65 & 202 with regard to budget saving ideas. 

    P.s. I love the comment from John Miller about ‘Democrats spending’!  Where was Mr. Miller hiding during the George W. years of spending like there was no tomorrow.  Well, tomorrow is here and it is a mess thanks in no small part to the Republicans and their 2 wars.

  10. Unaffordable? The watchword

    Unaffordable? The watchword here should be unsellable. Which is exactly what Evanston will get if they continue on this course. Unsellable properties, everywhere, at practically any price point. Informed buyers are looking at more than price and location, folks– now that irresponible governance, pensions, and potential fiscal calamity are finally getting the daylight they deserve.

    1. Look on the bright side

      Homes in Evanston are unsellable, nobody wants to move here?   People are leaving because they can’t afford to live here?

      The NIMBYs must be delighted…no outsiders will be moving in to the city, so the ‘native Evanstonians’ and ‘long time residents’ won’t be bothered.    If nobody moves in, there will be no need for new construction, no Tower, no more condos, and less traffic.

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