Proposed Joliet budget includes tax hikes, deficit

JOLIET – A proposed city of Joliet budget would hike property taxes, borrow money from reserves to cover a deficit, close a fire station, and not include enough money to pay for rusting police cars.

City Manager Jim Hock presented his proposed budget Monday to a City Council that immediately began to push back against the idea of raising property taxes.

“I don’t believe I would support a real estate tax increase with all these variables and unknowns out there,” Mayor Bob O’Dekirk told Hock at the meeting.

The unknowns, however, could make the financial outlook worse.

The budget does not include pay increases, and the city is just beginning to negotiate with unions on contracts that expire at the end of this year.

Hock said the budget assumes that the city will continue receiving the same amount of money it has in past years from its local share of income taxes, casino taxes, fuel taxes and other revenue that he admits are jeopardized by the state budget crisis.

Hock said even his proposed property tax hike could be made moot by Gov. Bruce Rauner who wants to freeze local property taxes.

“If it happens this year, even if you do approve an increase, you may be locked out,” he said.

The total budget is nearly $289 million, which includes several funds that are covered by special taxes and fees.

The $174 million general fund, which covers most city services and relies largely on sales and property taxes, shows a $5.3 million deficit. The deficit will be covered by reserve funds, but city officials are wary of digging deeper into savings set aside to cover short-term budget shortfalls.

Tax hikes

A 5 percent increase in the city’s share of property taxes is one of three tax hikes in the budget.

That tax would cost the owner of a $150,000 home an additional $29.64 a year, Hock said. The owner of a $400,000 home would pay an extra $79.05 a year.

The Joliet Public Library wants a property tax hike of 2 percent, which would have to be approved by the City Council.

Hock also has proposed an increase in the real estate transfer tax applied to property sales from the current rate of $3 per $1,000 to a rate of $5 per $1,000. The higher tax would generate $1.1 million for the budget.

Fire station and police cars

The budget also would close Fire Station No. 3 on Laraway Road, the city’s newest fire station which was built with the help of a federal grant. Hock said the station closing would not lead to layoffs but would save more than $1.7 million in overtime costs.

Hock said there is no money in the budget to replace police cars that he said “are rusting away and other aging vehicles.

He said the only capital expenditures included in the budget are those that the city is obligated to pay because they were approved in previous years, including roof repairs at Union Station.

The budget includes the hiring of an economic development director and an inspector general, two initiatives sought by O’Dekirk. To pay for the economic development director, the city would cut funds that now go to the Will County Center for Economic Development and City Center Partnership.

PROPOSED 2016 TAX HIKES • A 4.99 percent increase in the city share of the property tax will cost the owner of a $150,000 house an extra $29.64 a year. The city would get $1.6 million in additional revenue. • The Joliet Public Library also is seeking a 2 percent property tax hike. • The real estate transfer tax applied to sales of property would go from the current rate of $3 per $1,000 to $5 per $1,000. The city would get an additional $1.1 million