Palatine plans property tax hike as officials ponder other taxes, service cuts
The village and school district will likely raise their property tax levies.
Homeowners in Palatine, Illinois, should get ready to see their property taxes go up. The proposed 2018 budget for the Cook County village contains a recommendation to raise the property tax levy by 4.26 percent, or $925,000.
The village blames the state.
“If not for the inability of our state legislators to enact (public safety) pension reform and their outrageous actions of redirecting money from municipalities to fund their epic failures, there would again be no property tax increase,” the village budget read, according to the Daily Herald.
Palatine will dip into its reserve funds in order to pay an additional $917,000 to prop up public safety pensions.
But despite this massive investment, services will likely have to be cut.
“You can’t put enough tax on everything that we have to cover that kind of an increase,” Palatine Councilman Tim Millar said, according to the Daily Herald. “I think we should look at, unfortunately, reducing services or reducing some of our safety costs.”
As if that weren’t enough, Palatine homeowners will likely shoulder a property tax increase from their local school district as well.
Palatine-Schaumburg High School District 211 is seeking to increase its property tax levy. District board members voted 6-1 on Nov. 9 to raise the levy 2.4 percent, according to the Daily Herald. The final vote for that increase is scheduled for Dec. 14.
Palatine homeowners already pay some of the highest property taxes in the state. In Cook County, the median property tax bill is more than $4,500 annually.
But the village’s decision to raise the property tax levy will not solve its pension woes.
Taxpayer contributions to the Palatine fire pension fund increased by over 27 percent from 2012 to 2016, up to more than $3.6 million from just under $2.9 million. But that hardly made a dent in the fire pension fund’s funded ratio, which increased by less than two percentage points, to 57.3 percent in 2016 from 55.7 percent in 2012.
This means the fund has less than 58 cents on hand for every dollar needed to pay out future benefits.
After declining from 2012 to 2014, taxpayer contributions to the Palatine police pension fund jumped nearly 20 percent from 2014 to 2016, up to $3.5 million from around $2.9 million. Despite the increase, the funding level of the Palatine police pension fund rose by just 2 percentage points, to 59.5 percent in 2016 from 57.5 percent in 2014.
The need for reform is clear.
However, municipalities like Palatine are limited in what they can do regarding pension reform. Palatine and other towns need the ability to move new workers to 401(k)-style alternatives and away from costly city pension plans.
One possible model is the state university workers’ 401(k)-style plan. The plan has been operating for nearly two decades, and more than 20,000 workers have chosen to opt out of the traditional pension plan offered by the State Universities Retirement System in favor of the 401(k)-style plan.
Barring major reforms at both the state and local levels, Palatine residents should get ready for more tax hikes and service cuts.