The City has begun discussing the 2018 Property Tax Levy. The levy is the total amount of property taxes the City collects to perform the services it provides to the citizens of St. Charles. The levy pays for 24/7 police, fire and public works services, infrastructure enhancements/maintenance, planning, engineering and much more.
The City is considering keeping the tax rate the same as it was in 2017. Below are common questions and answers regarding property taxes paid to the City.
Does the City collect property taxes and distribute them to the various taxing agencies?
No. The Kane County Treasurer collects and distributes property taxes.
If the City froze its tax levy for nearly a decade, how come my property tax bill still increased?
The City’s tax levy is only about 10% of your total property tax bill. So even though we kept our portion consistent for the last decade, your total real estate taxes may have increased due to increases from the other 9 taxing bodies on your tax bill.
What does it mean to keep the levy frozen?
For nearly a decade, the dollar amount of property tax revenue collected by the City remained exactly the same. Even as costs of materials, labor, insurance, etc., rose steadily from 2009, the amount of property tax revenue remained exactly the same. It is similar to a household income remaining stagnant, with no salary raises or cost of living increases for nine years straight, while the costs of running and maintaining the household continue to increase.
How does a frozen City levy affect resident tax bills?
Property taxes are based on the value of a home—the Equalized Assessed Value (EAV)—as determined by the Kane County Assessment Office. As home values increased, the taxes residents paid to the City did not increase along with them. So the City’s portion of the total tax bill actually lessened in recent years.
What’s the difference between setting a levy amount and setting a tax rate?
Setting a levy sets the total dollar amount of property taxes collected for the city. That amount doesn’t change if property values increase or decrease. Setting a rate sets the amount collected as a percentage of assessed property value. This amount can change as property values increase or decrease.
If the new tax rate stays the same as it was 2017, what does that mean to residents’ tax bills?
If the City sets its 2018 tax rate consistent with 2017’s tax rate, the average tax bill on a $300,000 home would increase by $33.84 per year based on an estimated 4% growth in the value of the property. This is a reflection of an increase in home value over the last year.
What is the City doing to manage property tax levels?
The City uses multiple tactics to reduce its reliance on property taxes and keep its share of the property tax bill manageable.
- Abate Taxes to Save Residents Millions: Historically, the City has abated tax levies to pay for large capital projects. When bonds are issued to pay for projects, such as the new police station, the City does not use property taxes to pay those back. Instead, the City pays for those projects with sales, liquor, hotel/motel taxes, and other general revenues. In 2017, the City's tax abatement efforts reduced the entire levy by 40% – or $7.4 million total in property tax savings!
- Utilize Grants: The City always works to manage its resources as efficiently and cost-effectively as possible. One way we do that is by taking advantage of grants that are available to us for certain projects. In 2018, the city was awarded $1.3 million in grants for 7th Avenue Creek flood mitigation, and police and fire safety equipment.
- Maintain a Balanced Tax Base: Careful planning for community and economic development means St. Charles enjoys a healthy mix of nearly 2000 retail, commercial and industrial businesses. This diversification provides economic stability and means businesses, visitors and area consumers share in the cost associated with keeping St. Charles running successfully.
More information about taxes is on the City website at https://www.stcharlesil.gov/departments/finance. For more information about the levy-setting process, including a recent presentation made to City Council regarding the levy, visit https://www.stcharlesil.gov/news/2018/11/08/2018-property-tax-levy-infor....