DeKalb City Council approves 8% property tax decrease

City+Manager+Bill+Nicklas+reads+off+the+Oct.+25+City+Council+agenda+to+discuss+the+annual+property+tax+levy.

Abigail Norton | Northern Star

City Manager Bill Nicklas reads off the Oct. 25 City Council agenda to discuss the annual property tax levy.

Elisa Reamer, News Reporter

DeKALB — The DeKalb City Council moved forward with the consideration for the annual property tax levy of $6,845,317 for 2021, which means tax rates will be lower for DeKalb residents. 

City Manager Bill Nicklas worked with county officials to come up with the best guess based on where they are with their community equalized assessed value (EAV) to come up with the tax levy amount of $6,845,317.

The projected EAV for 2021 is $696,563,133, according to the Oct. 25 City Council agenda

“Every year, we tried to come up with a levy that divided by our community EAV, which produces the rate that every taxpayer is going to see on a tax bill,” Nicklas said. “They’re going to get a look at the city line items, and we usually have to assess the city general operations and then see pensions.” 

Nicklas proposed a property tax rate deduction by 8%, so homeowners will be paying less money out-of-pocket.

“Looking at an imaginary home with an EAV of $100,000, there’s a monthly market value of $300,000, and the actual taxes would go down about $65 for that homeowner,” Nicklas said. 

Mayor Cohen Barnes said a drive towards a tax reduction means economic development and more opportunity. 

“This is one of the ways that we can chart our course towards more affordable housing throughout the City of DeKalb,” Barnes said. “We can start lowering our tax rate that impacts everybody, whether you’re a homeowner or whether you’re an apartment renter.” 

The reduced tax rate is better for DeKalb residents and also economic development by attracting people and businesses to the city, Barnes said. 

Nicklas said the City of DeKalb needs to be able to use tax dollars to perform services that residents and businesses expect. Property tax has been able to pay for a portion of pension obligations, no Social Security obligations or Illinois municipal retirement fund obligations, which means DeKalb is far behind. 

The Illinois government requires police and fire pensions to be 90% funded by 2040, Nicklas said. 

There is a $1,278,142 shortfall between the city’s levy and the actuarial obligations for next year, according to the Oct. 25 City Council Agenda

The City Council also passed an ordinance to terminate the central area tax increment financing redevelopment area (TIF 1) and to transfer the funds from TIF 1’s special tax allocation fund to TIF 3. 

 A TIF is a way for the city to help finance various companies through taxes for a project site or for redevelopment within the city.

This termination means that the land area will no longer be used for the state to back redevelopment assistance, Nicklas said. The area in TIF 3 will still be eligible for rehab assistance. 

“​​Nothing has been more contentious or cause more problems in the city of DeKalb than the TIF district, and it will be an honor and a privilege to vote it away,” Fifth Ward Alderperson Scott McAdams said.