St. Charles eyeing increase to city portion of property tax bill

Owner of a home with a market value of $300,000 would pay an additional $41 a year

St. Charles residents are set to see an increase in their city property taxes next year as a result of the majority of aldermen backing a proposed 4.99% increase to the city portion of the tax bill.

At Monday’s St. Charles City Council meeting, aldermen voted 7-3 to approve the preliminary estimate of $24,576,475 for the 2021 property tax levy. Voting no were 1st Ward Alderman Ron Silkaitis, 4th Ward Alderman David Pietryla and 4th Ward Alderman Bryan Wirball.

The levy amount represents an approximate 2.81% increase from the prior year because of a proposed increase in the operating, as well as the debt service portion, of the levy, City Administrator Heather McGuire told aldermen. The 2021 levy estimate as presented after debt abatement would result in a 4.99% increase to the city portion of the tax bill for the average resident assuming no change to the equalized assessed value of the property.

As a result, the owner of a home with a market value of $300,000 would pay an additional $41 a year, or $3.41 a month. In voting no, Wirball noted that the city is in the process of hiring an economic development director.

“I would like to see what our director can do as far as bringing new businesses to our community, to bring in that additional sales tax revenue,” he said.

Wirball also noted the city has received $2.2 million in American Rescue Plan COVID-19 relief funds and is set to receive another $2.2 million.

“For me, I would like to hold off on raising the property tax levy so I will not support the increase,” he said.

St. Charles Mayor Lora Vitek defended the property tax levy increase. She noted the city’s property tax levy has been flat for seven of the last 10 years, with no property tax levy increases from 2010 to 2017.

“On average, residents in a $300,000 house will contribute an additional $40 for a total of $820 annually to help pay for a full year of city services, many of them around-the-clock,” she said. “Due to rising inflation rates, the cost of doing business has increased. Inflation rates have jumped nearly 28% in that time.”

Vitek also pointed out the city’s portion of taxes is about 10% of the entire property tax bill.

“Ninety percent of that bill goes to other taxing bodies that we have no control over,” she said.

As McGuire told aldermen, in order to bring the property tax levy – which is 30% of the general fund revenue – more in line with today’s dollar value which supports general operations and pays annual debt service payments; it is necessary to increase the property tax levy taking advantage of any increase in EAV.

“The general fund is the primary source of funding for annual principal and interest paid on general obligation debt,” McGuire said. “Over the next five years these annual payments average $6.5 million. In the past few years the growth in sales tax revenue has been needed to offset reductions in telecommunication tax, hotel tax and alcohol tax rather than offsetting personnel services and operating costs. As a result, staff is recommending the aforementioned increase in the property tax levy.”

A public hearing on the proposed increase in the city’s property tax levy will be held in December.

Eric Schelkopf

Eric Schelkopf

Eric Schelkopf covers St. Charles and writes entertainment stories for the Kane County Chronicle.