SYCAMORE – Tax cuts were the focal point of discussions during a workshop on a proposed $73 million budget for DeKalb County Board members Wednesday, but any reduction to property tax bills seems unlikely.
Ken Andersen, R-Sycamore, offered the possibility of eliminating a proposed $300,000 increase in property tax revenue compared to last year by shifting that cost to reserve funds, which would increase reserve spending from $900,000 to $1.2 million – higher than an auditor’s recommendation.
But if the county eliminates the additional property tax revenue, which amounts to an extra $9.25 for homeowners compared to last year, it would take years for the county to make up the loss because of tax cap regulations, said Gary Hanson, deputy county administrator.
Hanson said there are inherent penalties in state law for not levying the total amount. For example, if the county were to bypass the $300,000 and cost-of-living adjustments and new construction only increased by 5 percent, the county would be able to levy only about $15,000 more than the previous year.
At that rate, Hanson said it would take nearly 20 years for the county to make up the $300,000. And the $300,000 in reserves Andersen suggested in lieu of the property tax revenue would not be an option every year, leaving future board members with a large funding hole to fill.
County Administrator Ray Bockman said the decision from previous boards to levy the full amount and save as much as possible is the reason the County Board has been able to spend $900,000 in reserves comfortably.
“It’s not as politically popular that way, but that’s how you get fund balances,” Bockman said of the recommendation to not cut the levy amount. “In better times, people left [reserves] in place and spent less.”
Members also asked about health insurance costs, specific departments and other potential areas to cut.
Both administrators said board members can make any changes to the budget they want during the committee hearing process, which runs through October. Department heads can ask for more funding than what is proposed during the process. A public hearing will then take place in November before the County Board votes on a final budget.
While changes are sure to come before the final budget is passed, Bockman commended board members on smart financial planning in previous years, which has kept the county on solid financial ground.
“You’ve done a good job, pat yourself on your backs,” he said. “Look around, see how others are faring … it could be worse.”
The proposed budget is roughly $6 million less than last year because of a decline in federal grants and plummeting property values. The county’s assessed value is expected to decline by almost 9 percent, meaning the value of an average $200,000 house will fall to $182,000.
Reserve levels will drop from $10.5 million to $9.6 million.