Unless Evanston officials find a way to close the city’s $3.5 million general fund budget gap, homeowners will face a city property tax increase of nearly 13 percent next year.
That would come at a time when jobless rates are still at historically high levels and when the national inflation rate for the 12 months ended in July has been just over two percent.
Evanston aldermen have already approved an increase in public safety pension payments that will add 3.6 percent to property tax bills next year. And on Monday they approved refinancing sewer system debt that will add 0.68 percent to the levy — an amount that will grow further under their plan in each of the next four years to a total of a 2.7 percent increase. That already bakes into the budget a property tax increase roughly twice the rate of inflation.
As Assistant City Manager Marty Lyons explained at Wednesday’s budget workshop, a decision to not make cuts to close the general fund budget gap would mean an additional increase of more than 8.5 percent on tax bills.
Aldermen have already voted to impose a 10 percent increase in water rates and may consider increases in other fees and taxes in an effort to boost other revenue to reduce the size of program cuts and shift some of the cost increase away from property taxes.
In adopting the current year’s budget, city officials managed to keep the total property tax increase to 3.17 percent — but that was during a period when inflation was in negative territory, with the consumer price index actually falling 0.6 percent between mid-2008 and mid-2009 when budget preparations began.
It also required closing a $9.5 million gap between spending and revenue. Part of that gap was closed by increasing fees for trash hauling services.
For the current year, the big increase in property taxes came from public safety pension payments, which rose 3.17 percent. The debt service levy increase 0.61 percent, and the general fund levy actually decreased by 0.61 percent.
The city’s property tax levy currently represents about 20 percent of a resident’s total property tax bill, with the bulk of the rest going to Evanston’s two school districts.