SYCAMORE – Declining property values continue to be a problem in DeKalb County as board members look for new ways to bring in revenue for next year's budget.
Members of the County Board are in the beginning stages of discussing the budget for fiscal 2015, which begins in January. The board's finance committee met Wednesday to talk about the guidelines they will use to make budget proposals. They are expected to vote on the 2015 budget in November.
Finance committee chair Stephen Reid, a DeKalb Democrat from District 5, has a few concerns on his mind, including the county's reliance on local property taxes for its general fund.
Reid said about two-thirds of the general fund comes from property taxes. It's not a new issue, but it's one that hasn't changed for a few years, Reid said.
This year's budget projected an assessed value decline of about 8 percent, from about $1.9 billion to $1.7 billion. New construction is expected to account for 0.8 percent of the county’s assessed value at just over $11 million.
Declining property values do not necessarily mean governments collect less money – only that their property tax rates increase. However, without meaningful new construction of homes or businesses, the tax base does not expand.
The value of an average home in the county decreased from $200,000 in 2010 to $160,000 in 2013, according to this year's budget.
"We've been in a depression for years," Reid said. "The revenues are flat. There's no good tax base here because we have a lot of tax exempt institutions."
Officials are counting on new revenue they'll be getting from tipping fees at the DeKalb County Landfill south of Cortland to boost their general fund balance. The board voted May 21 to allow Waste Management to bring in an additional 500 tons of trash a day starting Aug. 1 to generate about $70,000 a month for funding the DeKalb County Jail expansion.
The original host agreement with Waste Management stated trash would be accepted starting Jan. 1, but county officials wanted to bring in the money to save for the jail expansion sooner.
County Board members want to spend $23 million on the DeKalb County Jail expansion, even though estimates stated the project could cost as high as $38 million.
Paul Stoddard, a DeKalb Democrat from District 9, said the county will draw revenue estimates of the tipping fees by assuming Waste Management will bring in the minimum 375,000 tons a year. Waste Management officials have said they will try to bring in the maximum 500,000 tons a year to generate more revenue.
County officials also are continuing to watch pending litigation the Regional Transportation Authority filed against United Airlines and American Airlines. The RTA, which oversees mass transit operations in Chicago and its suburbs – but not DeKalb County – claims airlines have established sham offices in Sycamore to avoid paying higher taxes in Chicago.
Although Sycamore rebates most of its share of sales tax revenue to the airlines through a negotiated agreement, DeKalb County has no agreement with the companies and takes in about $2 million in sales tax revenue each year as a result of their fuel purchases.
"If those decisions go the wrong way in a financial sense, we'd be looking at a large shortfall," Stoddard said. "We'd probably take the landfill money to cover the loss of revenue."
Stoddard said the county could cut some of the services it offers to save money, but he declined to specify what services could be on the chipping block.