The topic of property taxes comes to the forefront of most property owners’ minds during this time of year when property tax bills are mailed. The City of Peoria has a history of striving toward maintaining the financial health of the city while giving optimal services to the citizens of Peoria. The city maintains a “AA” rating by Standard & Poors, with the highest rating being “AAA.”
The council is responsible for setting policy and guiding the administration toward meeting the goals and priorities of the council. The “Property Tax Levy Policy” establishes the maximum property tax to be levied on real property within the city limits and provides for guidelines for increases or decreases in assessment to maintain city service.
The City of Peoria levies property taxes to support general operations, library operations, Illinois municipal retirement fund, firemen pension fund, and police pension fund.
The City of Peoria’s estimated revenue from property taxes to be collected in 2006 is $20.9 million, based on an estimated levy of $1.2899. Property taxes amount to approximately 19 percent of the city’s total revenue.
While the city levies $1.2896 in property taxes, $0.3432 is levied on behalf of the library, which has a separate board. This means the city’s actual tax rate for operations and pensions is $0.9464 or $347 on a $125,000 homeowner-occupied dwelling. This translates into a daily cost of 36 cents per resident.
The City of Peoria comprises only 11 percent of the tax bill of a property owner within the City of Peoria. Think about that. The City of Peoria provides all of our services for only 11 cents of every tax dollar. The 2006 tax bill shows schools at 60 percent, county at 10 percent, Park District at 9 percent, and other at 10 percent (library, mass transit, township, and the airport). The city’s property tax rate has remained approximately the same since 1995.
As I mentioned earlier, real estate taxes account for only 19 percent of the city’s revenues. Sales taxes account for nearly 40 percent of our revenues. The problem with reliance on sales tax dollars is that they’re a very elastic source of revenue that fluctuate significantly as the economy moves up and down. The city manager is in the process of exploring alternative revenue options that may shift some of the burden for city operations off of real estate taxes. There will be considerable discussion before any changes are contemplated.
From an elected official’s perspective, our constituents want more services with fewer tax dollars to pay for them. This is why it’s necessary for the council to prioritize how we can maximize the return on your tax dollar investment in our community. I’ve already indicated my priorities for the 2007 budget will focus on public safety. My belief is that by providing a safe community, our schools will benefit, as will our ability to attract and grow business. That discussion will take place in a future column. IBI