2004-97 MAKING THE ANNUAL TAX LEVY

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.f •,. Questions Regarding the Annual Tag Lew Q: What is the annual taz levy used for? A: The levy for the most part is used to cover the cost of items such as police and fire pensions, IMRF, debt service and the cost of health insurance which has been rising at a staggering rate for cities and private businesses across the country. As you know, these costs are set by contract, which we have little control over, and have increased by more than 15% over last year. Funds from the t�levy are not used for salaries or to fund the day-to-day operations of the city. Q: There has been a lot of discussion about"stabilizing the tax rate" and��collecting a proportional amount of tazes". What does this mean? A: Over a ten year period, property taa�dollazs received by the City has gone up by 27%, while the assessed value of property has increased by 52%. Simply put,that means the City is not receiving the incremental(year to year) increase in the property tax base which the Citv is taking on debt to create. If the city had the means, or had developed , the means, to receive the incremental share of the rising value of property over the last 10 !, years, the revenue from property taxes (without the homeowner paying any more) would I have been$1,688,000 more than it actually was during that same period of time. ' Q: It has been suggested that this is the way in which the system should work, that as development occurs taz payers should pay less. Is this not the case? A: Taxpayers do and will continue to benefit from this development in the form of significantly lower tax bills than if we were not in a growth environment. However, simply put,the cost of health insurance, pension and retirement costs, among other things, in the Midwest have always significantly outpaced the amount the City has collected from tax payers to cover those costs. Each year we are forced to cover a portion of those costs from other sources because we do not collect enough as part of our tax levy. Q: What will this most recent proposal mean for individual homeowners? A: It will mean that each and every year, unless your property is reassessed by the county, you will pay exactly the same amount to the Citv. It is important to remember that your total property tax bill includes paying the property taxes to School District 61, Macon County, the Park District, Richland Community College and other t�ing entities. In fact, of your total tax bill, only about 13.7% goes to the city.