St. Charles residents to see slight increase to city portion of property tax bill

St. Charles residents are set to see a small increase in their city property taxes next year as a result of a proposed 3.4% increase to the city portion of the tax bill.

The St. Charles City Council on Dec. 19 voted 7-3 to approve the $24.3 million property tax levy for 2022. Of that amount, the city would abate $10,165,001 in its entirety.

Voting “no” were 1st Ward Alderperson Ron Silkaitis and 4th Ward Alderpersons David Pietryla and Bryan Wirball. Illinois property taxes are paid one year in arrears.

After the abatement, the total operating tax levy estimate is $14,186,283. This is $464,199 or 3.38% more than last year’s 2021 extensions of $13,722,084.

The owner of a house with a fair cash value of $300,000 on the property tax bill would pay an additional $24 a year or $2 a month, assuming there is no change in the assessed value of a home relative to other properties and the city as a whole, Finance Director Bill Hannah previously had told alderpersons.

Hannah said almost all of the increase in the 2022 property tax levy is because of required increases in the police and fire pension contributions based on the results of the actuarial valuations completed as of April 30 and a small increase in the amount levied for the mental health board to keep the amount consistent with an estimated tax rate of $0.04.

The police pension fund’s required city contribution funded by the levy is increasing $300,164 or 7.8% to $4,170,718, Hannah said. The firefighter’s pension fund’s required city contribution funded by the levy is increasing $139,205 or 5.4% to $2,719,565.

“While the city still has many operating and capital needs that will require funding, staff feels that it would be appropriate to set the estimated total operating tax levy to incorporate the increased amounts for police and fire pensions, an increase for the mental health board and keep the other levy components essentially flat,” Hannah said. “This would keep the total increase at 3.39%, less than the increase last year, while maintaining the level of property tax dollars levied for the corporate, fire protection and police protection components of the levy.”

Third Ward Alderperson Paul Lencioni voiced concerns about rising pension costs.

“We must find ways to get these pension costs under control,” he said. “We have to have a plan at some point. I support what you’ve done. I think it is a noble effort. But it won’t do in the future.”

Hannah said there are things that can discussed in the long term.

“Your point is well-taken,” he said.

Other alderpersons voiced similar concerns.

Property taxes comprise about 25% of the city’s budgeted revenue for the general fund and are a key revenue source for funding core city services such as police protection, fire protection and public works, Hannah told alderpersons.

Last year, the city increased the operating levy from the previous year by 4.99%.

“This helped the city fund its operating budget for FY 2022-23 and pass a balanced general fund budget,” Hannah said. “The city has also benefited from increases in sales tax and other tax revenues over the past year, which has improved the city’s short-term fiscal outlook.”