Approved tax levy may lead to rate decline

By M. Robert Berg

The DeKalb City Council is trying to do its part in holding down property taxes for next year.

At the last city council meeting, the city’s share of 1994’s property tax levy was approved, which may lead to a tax-rate decline of 4.7 percent, according to DeKalb City Manager Bill Nicklas.

However, the rate decline for the city’s share of the property tax does not equal a decline for the average property owner. When property values go up, as they have been in DeKalb, the property owners’ tax bills goes up.

“The average single-family homeowner (should) see a tax bill increase of $8.35, or 70 cents per month,” Nicklas stated in a memo to the council.

The city of DeKalb’s share of property taxes will be only seven percent of the total taxes paid by DeKalb residents in the spring. Eight other taxing bodies also take a share of the composite tax rate, Nicklas said.

These percentages, though, are based on an estimate of total property value in DeKalb. The county is responsible for determining the actual value, Nicklas said. “The DeKalb County Supervisor of Assessments, Margaret Whitwell, has not established the city’s total equalized assessed value (EAV),” he stated.

The city’s portion of the levy includes three subdivisions where tax money goes. These subdivisions are the general operating fund (for DeKalb’s costs and services), the airport fund and the pension fund.

The approved levy only includes increases mandated by federal law, Nicklas said. “(The approved levy would) freeze the general operating levy at the 1992 level, freeze the airport levy at the 1992 level (and) increase pension levies mandated by the city’s fiduciary responsibilities,” he stated.

Freezing the general operating levy and the airport levy means the city may not be prepared for rising costs, Nicklas said.

“From the financial standpoint of the city, such a levy is severe in that it would not account for any inflationary increases in goods and services supported by the general fund or the airport fund,” Nicklas stated.

“Nevertheless, from the standpoint of the city taxpayer who faces a significant tax burden imposed by eight different taxing bodies, such a levy is reasonable and responsible,” he said.

Nicklas said service cuts are unlikely, but adding new services would be difficult also with the levy freeze.

The one area where the levy was increased was for fire and police pensions. These increases are mandated by federal law, Nicklas said.

These federal mandates, which lead to rising costs for local government, were the focus of a recent effort by DeKalb Mayor Greg Sparrow to make the public aware of this dilemma. “What you see is no increase in the general and airport levies, but only an increase for unfunded mandates,” Sparrow said.

The problem stems from federal legislation that is passed onto local government, Sparrow said. This legislation involves spending money, but this money is not passed on by the federal government, leaving the local government in a bind on where to find the funds to pay for the legislated costs, he said.

“The DeKalb County Supervisor of Assessments, Margaret Whitwell, has not established the city’s total equalized assessed value.”