Steve Daniels of Macon County Shared Vision again called on the Decatur City Council to avoid further property tax increases in the city at the November 3, 2008, council meeting.
"Tax increases should be the last resort for addressing budget imbalances. Not the first. High tax rates punish citizens and businesses that call Decatur home. We cannot grow our city with the highest tax rates in downstate."
Property tax rates, including the city levy, are higher than most neighboring cities and most major cities in central Illinois. At nearly $9.00 per $100 of assessed valuation, the aggregate rate in Decatur is $1 to $2 per $100 more than other communities. Decatur's rates are already 20% higher than most comparable communities. This rate means that nearly 3% of the market value of homes and businesses is collected in taxes every year. Other communities have rates between 2% and 2.5%.
Property taxes are assessed based on assessed value and a levy rate. With the already high current property tax rates, Decatur is encouraging businesses, jobs and families to choose to move to other communites. No economic decision is based on tax cost per capita as suggested by proponents of higher taxes.
Daniels reminded the city council that Decatur taxpayers already pay some of the highest property and sales tax rates in the entire United States. These high rates discourage economic growth and development within the city. The city is considering tax increases due to budget shortfalls and the adverse impact of pension costs for city employees from the national financial crises. Daniels urged the Council to reevaluate the current year budget and “live within the means” of the community.
Daniels has been a long-time proponent of fiscal restraint and competitive tax burdens to encourage economic growth. As a founding member of Macon County Shared Vision he previously encouraged the council to adopt sound fiscal and tax policies.
MCSV believes tax increases are bad public policy for the following reasons:
1. Need for Tax Increase is Not Well - Supported. The city council has not reforcasted the current year or future years results to legitimize the need for more taxes. Not one offsetting cost savings has been seriously considered as an alternative to raising taxes. Spending restraint should be the first consideration and not the last.
2. Tax Increases Discourage Economic Growth. Local property taxes are a key variable that sets Decatur apart from other Illinois communities that compete for local industry and families. Decatur's aggregate property taxes (including the city levy that is proposed for an increase), are already some of the highest in IL and the US. Current aggregate rates are near $9 per $100 of assessed valuation. Surrounding communities are closer to $7 per $100 and other major central IL cities are near $7.50 per $100. These rates equate to a tax rate of nearly three percent (3%) of market value as compared to two percent to two and one-half percent in other commuities like Forsyth, Mt. Zion and neighboring townships.
3. Decatur Should be a Local Leader in Tax Policy. The City of Decatur receives a great deal of attention from local media and as such other taxing districts may follow the lead of Decatur. If the City of Decatur holds the line on taxes, then so might other area taxing districts.
4. Tax Increases Unfair to Less Advantaged Residents. While homeowners recieve a homestead exemption that buffers high tax rates, any increase becomes disproportionately higher for those with lower home values. Property tax increases are more adverse proportionately to renters that make up thirty percent (30%) of the households in Decatur. Rental properties do not qualify for any homestead exemption.
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