People have been asking me why their city property taxes went up sharply this year. While much of it has to do with your assessment, of course, here’s the rest of the story.
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Until recently, City of DeKalb levied property taxes for pensions and FICA only. I went back as far as 2006, and the only years when the city levied for any other purposes are shown in the table, because collection of property taxes for bonded debt and for general corporate purposes is either new for DeKalb or a revived practice following long hiatus.
City administrators will tell you that these shifts of costs to the property tax are necessary to reduce dependence on other sources of revenues, but actually they are moves to hide budget holes caused by allowing a three-year hiring spree with costs that have badly outpaced organic revenue growth. If they weren’t, we’d have revenues freed up by these “shifts” for a robust streets program and other capital projects. But we don’t. In fact, we’ll be running up a $620,000 deficit in the next six months despite the additional $824,000. It’s a slo-mo case of drowning.
Also, the amount of the property tax allocated for corporate purposes is a little “convenient.” If you look at the amounts budgeted for pensions and FICA in the FY2016 General Fund budget, you’ll see that they add up to about $5.1 million, but the levied amounts specific to these allocations don’t quite reach $4.3 million. The $824,000 levied for “corporate” just about matches the shortage, without anyone’s being the wiser about how high these retirement-related costs have become.