DeKalb city’s proposed 2024 tax levy could save residents $100 on spring tax bills

DeKALB – The DeKalb City Council took a close look at a property tax levy proposal this week for the next budget year, which, if approved, could save the average homeowner $100 when they receive their tax bill in the spring, according to city calculations.

The levy is the amount of taxes the city intends to collect from property owners in a year. City officials have said that all revenue collected from property taxes will go to pay down DeKalb’s pension obligations for police and fire pensions, similar to past years.

Mayor Cohen Barnes said that while the value of taxpayers’ homes have gone up by 15% over the past year, the city has found a way to put money back in the average homeowner’s pocket.

Barnes said he sees the city’s ability to potentially give the taxpayers money back as great leadership. He said he hopes that surrounding DeKalb taxing bodies might follow suit.

“It’s leveraging conversations, but it’s also leveraging public opinion that if the city of DeKalb is continuously, every year, being able to do this, why can’t you, school district? Why can’t you, park board?”

Under the 2024 proposal, the city is seeking a property tax levy of $8.3 million, an 8% increase over the previous year’s levy. Although the amount levied would be higher than last year, the rate would decrease from 0.81 in 2023 to 0.63 in 2024, documents show. City officials have said they’re able to collect more money via property taxes at a lower rate for taxpayers because of increased economic development on the south side.

“It is estimated the lower rate would reduce taxes paid to the city by around $102 for a home with an [equalized assessed value] of about $137,000,” city officials wrote in a news release.

A first-round vote on the proposed 2024 property tax levy is expected at the City Council’s Nov. 12 meeting. The public also will have another chance to weigh in on the proposal at that time.

Some city leaders expressed support for the 2024 property tax levy proposal as presented.

Not everyone was fully on board, however.

Fourth Ward Alderman Greg Perkins said that the past few years, the city has contributed to about 80% of its police and fire pension obligations using the property tax levy, and the remainder has come from other sources. He said that if city continues to adhere to this practice, it could reach a zero balance by 2034.

“I don’t think there’s any way we can decrease the rate this much,” Perkins said. “I understand the desire to reduce the rate. I understand the reason we want to do that, but we’re making that decision to short pension by $2.1 million and grab it from somewhere in the General Fund. Now that becomes a discretionary conversation next year. Where are we going to grab it from? A lot of the costs in the budget are fixed.”

Seventh Ward Alderman John Walker said he supports the proposed property tax levy as presented.

“We were always promising to lower things and put money back in taxpayers’ pockets,” Walker said. “We always find reasons not to. And yeah, Alderman Perkins, you’re 100% right. That does kind of worry me. However, we can’t just keep sitting up here saying we want to help the taxpayers. Then, the city manager comes up with a nice, brilliant plan to put money back in our pockets and not take advantage of it.”

Some city officials expressed concerns about how other neighboring taxing bodies may proceed in response once they find out that the city is giving residents $100 back.

City Manager Bill Nicklas said that if the city looks to give the taxpayers $100 back, the library is going to take half of that money because it has proposed a levy for a slight increase in 2024.

Second Ward Alderwoman Barb Larson said she thinks residents would be content if the city did not increase the amount of property taxes owed over the past year.

“While it’s not a very fun thing to think about, I think maybe people would understand it, though,” Larson said. “At least we’re holding it.”

If the city moves to hold the line on its out-of-pocket property tax obligations from the 2023 tax year rather than budget for an increase of 8%, it could turn to General Fund revenue to meet the remainder of its pension costs, city documents show.