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Waukegan property taxes could be going up

Updated: January 30, 2013 1:15AM

WAUKEGAN — With a Dec. 21 deadline to file a tax levy with the county, the City Council could take action Monday on options that would raise property taxes by as much as $240 on a $150,000 home.

Among the factors behind the scenario is a recommendation from the city’s financial staff to shift fees for garbage collection from water bills to property taxes, a move aimed at increasing revenue from vacant properties that don’t have water service.

But Finance Director Tina Smigielski told the council Thursday night that a list of obligations — including future funding of police officers and firefighters hired with federal grants earlier this year — is behind the recommendation for higher taxes.

“The City Council has two tax-levy ordinances to consider,” Smigielski said. “The first will result in a 21 percent increase in the total tax levy compared to the prior year, but will allow the city to meet its pension obligations in a responsible fashion, provide for the local match of grant-funded police and firefighters, plug the general fund deficit, fully fund the residential garbage collection program (and) place the library in a position where they can reinstate service levels.”

While that option would come with the $240 increase — after subtracting the $60 garbage-collection fee currently on water bills — Smigielski told a committee-of-the-whole gathering that the second option offered by her staff would represent a 10 percent increase in the tax levy, which would equal a $115 increase for the owner of a $150,000 home.

Under that second option, Smigielski said, “there still would be very tough decisions regarding budget deficits for the city and the library,” though she added that it would address the public-safety grant obligation and fund garbage collection.

All told, the 21 percent increase would generate an aggregate tax levy of $23 million, while the 10 percent hike’s aggregate would be $19.9 million. Both figures do not include the city’s bond obligation of $11.1 million, which is added to produce an overall levy.

“Obviously, these are based on estimates and may vary depending on home value and the final (equalized assessed valuation) numbers,” said Smigielski, who noted that the council can consider not only the two options but act on a proposal of its own, as long as something is filed with the county by the Friday before Christmas.

Toward that end, 8th Ward Ald. William Valko proposed an 8 percent increase in the tax levy, featuring such alternatives as smaller contributions to the Illinois Municipal Retirement Fund for non-union employees and a zero-growth levy for the Waukegan Public Library.

In December 2010, the council was given options that included a 55 percent increase in the tax levy that would have fully-funded operations at the city’s 2010 personnel levels.

Aldermen chose to approve a zero-growth levy, a move that led to a deficit of more than $5 million and a round of employee layoffs.

According to Smigielski, among the factors negatively affecting the city’s financial position in the last decade is a drop in sales tax revenue, which represented 35 percent of overall revenues in 2003, but came in at 28 percent in the 2011 fiscal year.

Meanwhile, the property tax share of revenue increased from 38 percent to 52 percent between those two years. She added that the proposals crafted by her staff assume that current revenues will be stagnant.

While the council could act on Monday to approve a levy, it is also scheduled to meet Dec. 17 and could schedule a special session to debate and pass a tax levy prior to the deadline.

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