For the fourth consecutive year, the city of Waukegan will not increase its property tax levy, keeping it the same as it was the previous three years.
However, city officials warn rising costs — including contributions to police and fire department pensions — may portend a change in the next few years.
Director of Finance Don Schultz said during a meeting of the city’s Finance and Purchasing Committee Monday that continuing to keep the real estate tax levy constant may not be sustainable much longer.
“Although we’ve been very conscious of the taxpayers and trying to keep the levy flat over all these years, the city can’t continue to do that year after year, after year, after year,” Schultz said. “At some point, you’ll have to consider an incremental increase on an annual basis.”
The Waukegan City Council unanimously approved the 2024 real estate tax levy for payments due next year of just under $37.3 million without discussion Monday at City Hall, assuring taxpayers will not be dipping further into their pockets at the city’s expense.
Though the city intends to collect just under $37.3 million in property taxes next year, its budget for the fiscal year ending April 30 projects revenue of $238.4 million, with the rest coming from a variety of other sources.
The Finance and Purchasing Committee received a full presentation of the proposed levy and the destination for the money from Schultz. Most of the council members were there and participated.
While the city is not increasing property taxes, Ald. Edith Newsome, 5th Ward, said Waukegan’s action does not mean a property owner’s tax bill will not be higher. It also includes levies passed by other governmental entities like townships, school boards, the county and more.
“We don’t control the other taxing bodies,” Newsome said. “Their taxing bodies will probably go up anyway. They may not understand the city of Waukegan has kept its taxes flat, but they will accuse the city of raising their taxes anyway. We don’t have any control over that.”
Mayor Ann Taylor said after the meeting she was glad the city was able to keep the levy flat for the fourth year in a row. Uncertainties, like rising costs of police and fire pensions and the precise expense of waste hauling, are concerns. They could lead to future tax increases.
“We don’t know what’s going to happen with our grants with a new administration in Washington,” Taylor said. “Our residents don’t pay for waste hauling. It comes from property taxes. We know they are going up, but we don’t know how much. There are about 2,000 new accounts.”
Should tax increases be needed in the future, Schultz said they can be more palatable if they come in small doses each year, rather than a large amount at one time. One possibility is tying them to the consumer price index, with a floor and ceiling.
“People can accept small increases (one) at a time,” he said. “It’s when you increase the levy in a large, significant sum that people can’t budget for it. We would never propose that. If you increase your levy by 1%, 2%, 3% a year, it’s a small amount.”
Stewart Weiss, an attorney with corporation counsel Elrod Friedman, said though individual taxpayers will not pay more, the city’s overall tax base is growing with new taxpayers. That means more overall revenue.
“The city is saying, ‘We need this amount,’ and that becomes a smaller and smaller percentage as the tax base goes up,” Weiss said. “As things keep going up like the casino, that helps take the tax burden off individual homeowners.”
With other sources of revenue covering things like payroll and public works, property tax revenue is pegged for pension contributions, the Waukegan Public Library, waste collection, some of the street resurfacing and other pension obligations.
Schultz said some of those costs increased this year, like pensions. The levy was able to remain flat because needs like streets came from home rule sales tax and the street fund.