DeKalb city leaders could be poised to move forward with the final adoption of an $8.9 million tax levy.

A tax levy is a tool that determines how much money a governing body will collect in property taxes each year. Other measures that contribute to the funding formula include the equalized assessed valuation of the taxing body and the tax rate.

At its meeting this week, the City Council unanimously voted on an ordinance to help make it happen. A final vote still is needed, however.

City Manager Bill Nicklas noted that the numbers have not changed since the city’s previous presentation on its tax levy.

The city’s proposed $8.9 million tax levy, which includes a pass-through amount of $4.4 million for the DeKalb Public Library, is projected to carry a total aggregate extension of $13.3 million, city documents show.

For levy year 2025, the tax rate remains 0.62, city documents show. The estimated EAV for 2025 taxes payable to the city in 2026 is $1.44 billion.

EAV is defined as the taxable value of property within a taxing body. Municipal leaders set levies based on assumptions about property value.

A common question that Nicklas said he’s fielded is why the city doesn’t pay down the public obligation on its pensions.

City staff have said all the property taxes levied by the city go to help fund police and fire pension payments.

“We’re living on our reserve right now,” Nicklas said. “That’s why I’ve been stubborn about saying I don’t think we, right now, have slack.”

The tax levy makes for an estimated 7% increase for the city over the prior year’s aggregate extension of about $8.3 million. Under the Property Tax Extension Limitation Law, municipalities are limited to a 5% increase, the consumer price index or the rate of inflation – whichever is the lowest – plus new construction.

As a home-rule community, however, the city of DeKalb is imposing that rule on itself. In doing so, a public hearing on the tax levy was held, inviting residents to come with questions or remarks. No one from the public chimed in.

Since 2019, the city has lowered its tax rate, city documents show. Residents’ property tax bills are based on municipal tax rates and also the value of their home.

Nicklas noted that there’s a “negligible” difference in the lowering of the city’s tax rate this time.

Mayor Cohen Barnes gave kudos to the city manager for his leadership on the matter.

“If we keep bringing in the businesses that we’ve been bringing in and driving more property tax revenue coming in, that’s how we solve this police and fire pension crisis,” Barnes said. “Hopefully, the state’s going to do something. They’re going to have to.”

In a related development, the City Council voted 8-0 to approve an ordinance for the abatement of taxes levied for the city’s corporate purposes in tax year 2025. Final action on the matter is expected at the council’s next regular meeting.

The city has five outstanding bonds, which are being repaid from the general fund, city documents show. Current city practice is to abate the tax levies as alternate revenue sources.

City staff said they have no intention of using property taxes to pay the bonds.

Nicklas said he expects the city to have some savings from the general obligation bond debt in about two fiscal years.

“It gives us a little breathing room,” Nicklas said.

Sixth Ward Alderman Mike Verbic expressed some concern about the city’s decision.

“This tax increase is a little tough to take after what we’ve been able to do the last couple of years,” Verbic said.

The levy proposal calls for a tax bill of $941.92 for a DeKalb resident who owns a home with a 2025 EAV of $157,229, city documents show. For levy year 2024, that same homeowner paid $850.67.

As in past years, DeKalb city leaders touted substantial industrial growth on the city’s south side as a reason for taxpayer savings.

Barnes expressed support for the tax levy as presented.

“That additional revenue is going to come in to offset the police and fire pension crisis, which is going to allow us to protect those reserves that we have,” Barnes said. “Because we don’t know when the next great recession or next COVID or whatever’s going to come around, I think we keep staying the course and working hard to diversify our tax base, bring in that new revenue, and protect our fund balance.”

Nicklas urged the council to provide its support.

“This is establishing what the baseline is for our levy,” Nicklas said. “... We feel that our levy will result, if anything, in a very negligible decrease in our city rate of 0.62286 per $100 EAV.”

The City Council is expected to put the tax levy for 2025 to a final vote Nov. 24.