“Rahm rules out property tax hike” plus 2 more

Rahm rules out property tax hike
Property tax cap in effect for some homeowners
Low property tax levy has prevented city from receiving millions

Posted: 23 Feb 2011 09:29 PM PST

Rahm rules out property tax hike

BY FRAN SPIELMAN City Hall Reporter Feb 24, 2011 04:54AM

Mayor-Elect Rahm Emanuel holds his first formal press conference Wednesday, February 23, 2011, at the Union League Club. | Jean Lachat~Sun-Times

Mayor-elect Rahm Emanuel on Wednesday ruled out a property tax increase of any size, declared an end to the days of the rubber-stamp City Council and solicited ideas — even from aldermen who opposed him — on ways to solve the city's financial crisis.

Emanuel rocked the boat with his pre-election threat to re-organize the City Council — and strip Ald. Edward M. Burke (14th) of his police bodyguards and, possibly, his Finance Committee chairmanship.

But, Emanuel's first news conference as Chicago's mayor-elect offered Emanuel the chance to change the subject from "personalities or individuals" to the partnership he hopes and needs to forge with the City Council to close a $1 billion-a-year structural deficit.

"They cannot be a rubber stamp. That's unacceptable. The challenges are too big. They can't be what they were in the last few years. They don't want it. The city doesn't want it. ... I was a former legislator. I don't want it," Emanuel told reporters at the Union League Club.

"The city also knows that we paid a price for Council Wars as a city. Those two extremes — rubber stamp, Council Wars — [are] unacceptable. I ask them to be the partners in reform. ... If they have ideas on how to save money, walk it right up to my office. If they have a change they want to make that brings more efficiency, more transparency, let's go. ... I am open to different roads to take to the objective I've set out."

Emanuel also issued an open call to Chicagoans interested in joining his new government.

"If you ever thought of public service as part of your life, sharpen your resume. I want people ... with a level of experience and background from the private sector, from academia, from our foundations and charities to be part of city government. This is a unique time in our city's future. It's a chance to make a new, fresh start. And that means bringing in talent and energy that we usually don't see in public service," he said.

Emanuel's pledge not to entertain a property tax increase of any size came in response to a question about how he planned to solve the city's pension crisis.

A bill approved by the Illinois General Assembly over Mayor Daley's objections would saddle homeowners and businesses with a $550 million property tax increase in 2015 unless pension concessions are negotiated or another new revenue source is found.

During the campaign, Emanuel ruled out raising property taxes that much, which would amount to a 90 percent increase. On Wednesday, he was asked whether he would entertain a property tax increase of any size. His answer was an emphatic no.

"I'm not looking at a property tax increase," he said.

Emanuel has already rankled union leaders by suggesting cuts in the benefits of existing employees. On Wednesday, he threw an olive branch to the unions by declaring his unqualified support for "defined benefit pensions." That means he has no plans to switch to the 401(k) plans favored by private industry.

On other matters, the mayor-elect:

■ Declared his intention to get involved in some of the 14 aldermanic runoffs to re-shape the new City Council to his liking.

■ Said he has no agenda for the Legislature's spring session, noting that Chicago has "one mayor at a time" and that mayor is Richard M. Daley until May 16.

■ Reaffirmed his commitment to dump Police Supt. Jody Weis, who has been on a one-man public relations campaign to save his job by revealing the steady decline in homicides and other crime.

"We have gone through a period of time where our superintendent and the Police Department have been back and forth with each other. Yes, the results show a reduction in crime. But, we still have a murder rate on a per-capita basis in parts of the city double that in New York. We have made progress, but not progress enough. ... The statistics are true. The quality of life is not," he said.

"I have nothing personally against the superintendent. Nothing. But, [during] a time in which we've added nine to ten significant positions in the central bureaucracy, we have not added a single beat officer. ... I do not believe you beat crime through bureaucracy. You beat it with the beat officer. ... I will look for a superintendent who shares that philosophy."

Emanuel said he would look for somebody who has the "trust and confidence" of the rank-and-file, but he made no firm commitment to choosing an insider to replace Weis, a career FBI agent who was the first outsider in more than 40 years to serve as Chicago Police superintendent.

■ Promised to move "with a quick step" to establish his transition team and order an audit more extensive than the annual review conducted by a major accounting firm. The new audit would be aimed at pinpointing the $75 million in cuts he has promised to make to Daley's final budget. It will also help determine what areas of contracting the city is exceeding its minority set-aside goals and where it is falling short.

■ Said Interim Schools CEO Terry Mazany would be considered for the permanent job, but he's looking at other candidates as well.

■ Disclosed that he got congratulatory phone calls from former President Bill Clinton, New York City Mayor Michael Bloomberg, Gov. Quinn and a host of other high-ranking elected officials in addition to the previously-disclosed calls from President Obama and Mayor Daley.

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Property tax cap in effect for some homeowners

Posted: 23 Feb 2011 02:17 AM PST

By BRETT BUNDALE
The Daily Gleaner

When property tax bills arrive in the mail next week, homeowners will find an added feature highlighting the new cap on assessments.

Service New Brunswick will include two assessments on each bill for owner-occupied homes: one with the three per cent cap on property assessment increases and one without.

"What's new in 2011 is that people who are eligible for the cap will find two assessment values on their bills," spokesman Brent Staeben said Tuesday.

"We need to show the assessment value of the home with the cap for tax purposes but because this is an interim two-year measure, we need to continue to make sure we reflect the real and true market value of home,'' he said.

After years of soaring assessments - and in most cases, higher bills - the Progressive Conservative government tabled legislation in December to cap residential property assessments to three per cent for 2011 and 2012.

"We have made a commitment to help homeowners, some of whom have had their property tax bills double in the past 10 years," Local Government Minister Bruce Fitch said at the time.

The government is consulting with municipalities and other stakeholders on how to build a fairer and more transparent property tax system. It remains unclear what will happen to property tax assessments after the two-year period is up.

However, the three per cent cap might still be leaving some New Brunswick homeowners feeling squeezed.

Although the majority of homeowners saw assessments climb by five per cent or less last year, some discovered increases of up to 40 per cent.

Fitch said the interim cap will not lower bills but it will "protect homeowners from the large jumps we have seen during the last few years."

Also, the three per cent cap only applies to the roughly 232,000 owner-occupied homes in New Brunswick that are used as a primary residence.

The remaining 221,231 properties - from cottages to income properties - aren't eligible for relief.

In addition, the cap only applies to the normal market value increase of the home, not major renovations.

"It's meant to protect homeowners from the jumps we've seen in assessments over the last couple of years," Staeben said. "If you put $50,000 of investment in your home this year ... it's not meant to protect you from that investment."

Meanwhile, residents who suffered damage to their property during December's severe storms could be eligible for a reduction in their property assessments this year.

If the value of a property has gone down because of storm damage, property owners can appeal their property tax assessment next week and pay less tax.

"The storms happened so close to when final assessments were prepared that our assessment staff was not able to visit every property affected," Fitch said recently.

"The 2011 assessments may need to be lowered for some properties, depending upon the market impact of the storm damage on each property."

In recent years, a growing number of homeowners upset with skyrocketing bills has submitted requests to appeal assessments to Service New Brunswick.

Last year, the department received 8,711 requests for appeals, slightly above the 8,400 requests in 2009, which was the highest number in more than a decade. Only the assessments - not the rates or total tab - can be challenged.

Staeben said officials who evaluate assessments for the department are part of the Association of Assessing Officers. He said the international standard for appeals is two per cent of properties appealing. "We had 1.9 per cent so just a hair better than the standard."

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Low property tax levy has prevented city from receiving millions

Posted: 23 Feb 2011 08:30 PM PST

Grand Island's city property tax levy is so low that it has bumped the city out of receiving an estimated $400,000 of financial help from the state.

Certified public accountant Terry Galloway made the announcement Tuesday night to the Grand Island City Council during a report on the city's audit. Almquist, Maltzahn, Galloway and Luth, CPAs, performed the audit on the city's general fund as well as the city electric and water utilities.

Galloway said Grand Island is not getting what's known as "municipal equalization" funds.

"Normally, a city the size of Grand Island would get about $10 per person" of municipal equalization money, Galloway told the mayor and council.

But being eligible for municipal equalization money means having a property tax levy that is at least as high as the statewide average for city property taxes.

For Grand Island, that would require an overall tax levy of 36 cents, based on 29 cents per $100 of valuation for the city's general fund operations and 7 cents for the city's debt.

Grand Island's overall property tax levy is 29 cents — far below the 36-cent threshold.

"Because we've held the levy down and the levy has been low for many years here, we haven't participated in municipal equalization," Galloway said.

At the $10-per-person level, Grand Island could be receiving $430,000 a year in municipal equalization. Galloway estimated the amount could be as high as $500,000 a year.

"Municipal equalization — is that a new program of the state?" Mayor Jay Vavricek questioned. "Or has Grand Island never inquired about that?"

"Once we dropped below the statewide average, we haven't participated in that state revenue for a few years," Galloway said.

"What you're saying is the state provides support for municipalities that have a slightly higher property tax rate, and if you're lower than that, you get no assistance?" Vavricek questioned. "Is that what you're telling me?"

"Correct," Galloway said. "The reason for that is they are saying the basis is you can raise your property taxes to your local taxpayers. Therefore, we're not going to give you state revenue for that. If you have room and you're below the statewide average, we're not going to give you support; you can put it on the taxpayers."

Grand Island did receive municipal equalization through 2003-04, but that was the last year. The next year, the city dropped its property tax levy from 37 cents to 25 cents per $100 of valuation.

"I think that's what triggered us to go below the leverage," said Mary Lou Brown, finance director and interim city administrator.

That decrease in local property tax support for the city was authorized by the city council. A year later, when the council tried to maintain the 25-cent levy, Vavricek vetoed the levy down to 22.5 cents. He served his first term as mayor from 2002 to 2006. He ran unsuccessfully for the 3rd Congressional District seat before running for mayor again in 2010. He was sworn into office December 2010 for his second mayoral term.

Gary Krumland, legal counsel for the League of Nebraska Municipalities, an association of most Nebraska cities and villages, said most cities and villages do receive municipal equalization.

The Legislature created the municipal equalization fund in the late 1990s when it implemented levy lids and budget lids, he said.

"A lot of smaller communities, because of the levy limits and things, had to reduce their property tax request quite a bit," Krumland said. "This was something put into the statutes to help those cities that had less ability to raise taxes because of the levy limits than others."

A formula based on a city's population and valuation compared to other cities' populations and valuations determines the amount of municipal equalization received from year to year.

"You are comparing one city's ability to raise property taxes versus another city's ability to raise property taxes," Krumland said.

A city's property tax levy is another factor, he said.

"If your levy is below average, you start losing your ability to get municipal equalization funds, and if it's very low, you don't get any at all," he said.

Among the long list of Nebraska cities slated to get municipal equalization money this year, Bellevue is estimated to get $531,000, Broken Bow $183,000 and Central City $160,000, according to Nebraska Department of Revenue reports.

Lincoln, Omaha and Grand Island are estimated to receive none — so is Aurora.

Krumland said larger cities often don't receive as much or none at all because they may have higher tax bases and more ability to raise taxes.

All cities pay into the fund to create it, though, Krumland said.

It's created from premiums paid to cities by insurance companies and the state administrative fees for collecting city sales taxes. This year, the fund will have an estimated $17.2 million, based on Department of Revenue reports, but more than $20 million would be needed to fully fund the program for all the eligible cities and villages, Krumland said.

Galloway told the city council it may be wise to think about a property tax levy increase in order to become eligible for the municipal equalization funds.

"If we would ask for a little bit more in the way of a levy, I think we can get twofold for the state revenue," Galloway said Tuesday night. "Maybe by even raising the levy by 1 cent, you may be able to get somewhere between $400,000 to $500,000 more of state revenue by just increasing that levy.

"It could be a big impact — two for one," Galloway said. "Those $400,000 to $500,000 will come back from the state and not local taxpayers."

Brown estimated the equalization amount for Grand Island may be more in line with about $200,000. That's what the city had received historically.

Grand Island also stands to lose some $350,000 of state aid to cities money. The Legislature gave second-round approval Wednesday to cutting $44 million of that aid statewide. The cut is part of Gov. Dave Heineman's budget-balancing plan in which the state needs to trim nearly $1 billion in spending.

Many cities and counties, including Grand Island and Hall County, have objected to the cuts, saying they will force local government to make serious cuts in services or raise local taxes to keep services status quo.

Property Tax

Thursday, February 24, 2011