Rising pension obligations are not the greatest barrier to reducing Decatur's property taxes

Decatur city government’s portion of property taxes will likely remain flat next year with the property tax rate expected to decline from 1.6908% in 2022 to 1.6603% in 2023.  Thus, if the value of your property is unchanged, the amount of property taxes paid to the city should go down.  However, decisions by other taxing bodies (e.g., Decatur Public Schools) may result in an increase to their tax rate leading to a higher property tax bill for individuals overall. 

Property taxes can fund dozens of municipal services ranging from road improvements to police to school crossing guards.  In Decatur, city property taxes fund fire and police pensions, Decatur Public Library, Decatur Municipal Band, and a portion of the city’s general obligation bonded debt with the majority of property taxes used to pay fire and police pensions.  Rapidly rising pension obligations makes it difficult for city property taxes to be used for other services.  However, pension obligations are determined by the state not the city.

IN DECATUR, THE MORE SIGNIFICANT BARRIER TO LOWER PROPERTY TAXES IS DECLINING EQUALIZED ASSESSED VALUE (EAV)

The past two decades, the city’s EAV rapidly increased and then shrank. In 2000, the city’s EAV was $639.1 million and the total direct tax rate was 1.394%.  In 2010, the EAV was $922.2 million and the tax rate was 1.244%.  In 2020, the EAV was $848.7 million and the tax rate was 1.704%.  Thus, between 2000 and 2010, EAV grew 44.3% and the tax rate shrank 27%.  Between 2010-2020, EAV shrank 8.0% and the tax rate grew 37%.  Had EAV grown 44.3% between 2010-2020, the city’s EAV would have been $1,330.7 billion.  With an EAV of $1,330.7 billion, the city would collect $22.1 million in property taxes assuming the proposed 2023 tax rate of 1.660%, as opposed to the $15.3 million predicted to be collected next year, additional taxes that could cover rising pension costs, general obligation bonded debt, and more.  Given the decline in EAV, the ability for the city to provide public services will continue to be strained for the foreseeable future. 

INSTEAD OF MAINTAINING ELEVATED TAX RATES, ALLOW NEW BUSINESSES TO OPERATE AND ATTRACT NEW RESIDENTS

While in and of itself, the cannabis industry will not solve the city’s need for growth, the prohibition of this industry is an example of the historical barriers the city council has put up for new businesses and their customers.  Meanwhile in nearby Harristown, before ever opening its first cannabis dispensary, the village is considering permitting a second.  The reason is revenue.  Revenue coming from Decatur residents.  In other words, Decatur residents leave the city to purchase a legal product, grow that municipality’s local economy, and when our residents return to Decatur, they are greeted to high property taxes. 

PLEASE EXPRESS YOUR VIEWS AT THE NEXT CITY COUNCIL MEETING

The next meeting of Decatur City Council will be Monday, December 19.  Meetings take place at 5:30 PM in the council chambers located on the third floor of the Decatur Civic Center (1 Gary K. Anderson Place).  Free parking is available in the lot immediately south of the entrance.  Citizens are encouraged to attend meetings and express their views.  Citizens are allotted 3 minutes per person near the beginning of each city council meeting.  In addition, citizens can provide comments regarding one regular agenda item per meeting for up to three minutes provided they notify the city in advance (and prior to the start of the meeting).  You can request to speak on a particular agenda item at a council meeting by filling out an on-line form at: https://www.decaturil.gov/mayor-and-council/advance-request-to-speak-at-council-meeting/.

CITIZENS ARE ENCOURAGED TO PROVIDE FEEDBACK TO CITY COUNCIL MEMBERS

If you would like to discuss city issues with a council member, phone numbers and email addresses for each council member can be found at the following link: https://www.decaturil.gov/mayor-and-council/council/.

AGENDAS FOR CITY COUNCIL MEETINGS ARE AVAILABLE ONLINE

An agenda and information about each agenda item for each city council meeting can be found at: https://www.decaturil.gov/mayor-and-council/council-meetings/.