In “DeKalb Gives First Approval to Property Tax Levy,” we get this:
The aldermen had previously set the ceiling for a property tax levy at $9.67 million, and were given two options by city staff to set the request at either $9.67 million or $9.63 million – the amount the city levied last year.
According to the Chronicle, the city council appears to support the higher levy, and the rate would go up, too, to about 79 cents. Anything else?
The city uses property tax revenue to fund pensions of city staff, police officers and firefighters. The $9.67 million request would be able to fund all the police and fire pensions, and 45 percent of the pensions of city staff. The other 55 percent will have to be made up from one of the city’s other funds, she said.
Let us summarize (using both today’s Chronicle story and Monday’s CB post.)
- As a rule, city property tax collected ONLY goes to city pensions.
- The property tax levy will probably go up for tax year 2012.
- As the levy goes up, the rate will go up, too — about 7 cents.
- A 7-cent hike would probably set a record.
- Despite a probable record hike — and the investment gains we showed you Monday — it’s said we still need to put more money up front to cover rising costs.
The Chronicle either left out, or did not ask for, the total amount of the IMRF required contribution for next fiscal year, but for FY2011 it was $2.1 million (see PDF page 104). Also, below are past years’ levies specifically targeted for IMRF. I do not know whether previous levies constituted the entire contribution or not; I suspect they didn’t. Still, the numbers should give you an idea of the growth in costs.
City Property Tax Levy Devoted to IMRF Pension Funding, by Tax Year
2000 – $185,180
2001 – $350,012
2002 – $192,002
2003 – $383,786
2004 – $538,621
2005 – $687,940
2006 – $704,053
2007 – $795,624
2008 – $615,952
2009 – $277,142
2010 – $479,245
2011 – $668,365
The years of significant dips in contributions, 2002 and 2009, correlate with voluntary and involuntary separations occurring during the fiscal years following the tax years. In FY2004, it was the IMRF Early Retirement Incentive (ERI), and in FY2011 we had the Voluntary Separation Program and layoffs.
ERI can be offered every 10 years and by the looks of things, may have to be put on the table again soon. Unfortunately, we are not nearly finished paying off the last one yet (see page 97 of the PDF file).
On February 10, 2003, the City adopted Resolution 03-12, Adopting an Early Retirement Incentive Program Offered by the Illinois Municipal Retirement Fund (IMRF). Eligible employees were required to enter into an irrevocable pledge to retire by February 15, 2004…Eleven employees of the City accepted the early retirement agreement…[A]s of June 30, 2011, the City’s remaining contributions due under the program were $843,489. In accordance with GASB Statement 47, this amount is not reported as a liability on the City’s financial statements…
The General Fund might look good for the moment, but I have grave concerns about the fiduciary funds and the increasing liabilities that are off-budget entirely.