DeKALB – DeKalb city officials are now considering a new tax levy option that might result in a small property tax savings for homeowners on their 2020 tax year bill.
DeKalb City Manager Bill Nicklas said city officials had originally recommended a $6,865,743 levy and a 1.1223% tax rate for the city. For a $154,700 home in DeKalb – which is the median home value in the city – that would mean that homeowner's property tax bill for tax year 2020 would increase only by $11, he said.
"But it went up, so that was a problem," Nicklas said, echoing expressed concerns from residents about the COVID-19 pandemic being financially hard on local families.
In response, Nicklas proposed a new option during the Monday City Council meeting: a $6,522,456 city levy and a 1.0662% tax rate, which is about 7.6% lower than last year's tax rate.
“That’s the lowest rate [decrease] we’ve had in a long time,” Nicklas said.
For that $154,700 home, Nicklas said, that would mean the homeowner would save $16 on their property tax bill. But there's a caveat, he said.
According to city documents, the estimated 2020 rate-setting equalized assessed value, or EAV, for DeKalb is $611,750,000, with final numbers expected to be released in November. Nicklas said he believes that estimate is pretty safe and that the city took a conservative approach with that.
"But we don't know," Nicklas said. "Because right now, we're coming into the time for property tax appeals. And last year, there were more appeals ... than we ever expected, and so we were a little bit off – not a lot – in our EAV. But that's one of the key factors in determining what the rate is, obviously, and if there's a significant drop in that, then it does affect the rate. It's not quite as low."
Nicklas pointed out to the City Council this new property tax levy proposal means less money in the city's fund balance. He said the city will still be within its 25% reserve fund policy, but the dollar amount left in the city's reserves would be $364,581.
"You forgave more than that in terms of restaurant and bar tax to our hospitality businesses back in March," Nicklas told aldermen. "So it only takes a couple of months of no revenue to get us down to the break even point. So I say we can't go any lower than that, even though some of us would like to have even lower taxes."
The proposed levy payable in 2021 will not capture the value of the Ferrara Candy Company distribution center or Facebook data center starts in 2020, township and county assessment officials told city officials.
"Next year’s Citywide EAV may jump by $10 million or more because of the Ferrara and Facebook construction values alone, but this benefit is a year away," city officials wrote in meeting documents.
Nicklas said the consumer price index, or CPI, for the levy is expected to be about 2%. That's about the same as the previous year.
The change would only apply to the city's portion of a homeowner's property tax bill, which generally hovers at around 10%.
Nicklas said the public hearing and first reading of the newly proposed levy is scheduled for the Nov. 23 City Council meeting. The second reading is set for Dec. 9, he said.