Like Aurora Mayor John Laesch predicted during his inauguration speech, residents could see an increase to the city’s portion of the property tax they pay next year in part because of debt the city has taken out this year.
The proposed property tax levy of roughly $103.7 million, which is an increase of $11.1 million – or 12% – over the previous year’s, was unanimously recommended for approval by the Aurora City Council’s Finance Committee on Thursday.
If eventually approved by the full City Council, the levy would likely mean the first property tax rate increase since at least 2017, according to a presentation by Aurora Chief Financial Officer Stacey Peterson. She said the City Council is expected to vote on the levy on Dec. 16.
The tax levy is the total amount the city of Aurora would be looking to get in property tax revenue next year, but the rate is the percentage of a property’s assessed value that the owner has to actually pay in taxes. Property tax rates are set by county government, not the city itself, based on the city’s levy and the total assessed value of all property within city limits.
The owner of a house assessed at $300,000 in 2023 could see a $211 increase to the city’s portion of the property taxes they need to pay next year, Peterson’s presentation showed. That accounts for both the projected increase in tax rate and for an estimated increase in the house’s assessed value of around $27,000.
While property tax rates aren’t typically calculated by counties until around April or May, the estimated tax rate is $1.63 for every $100 of assessed value, Peterson said at the Finance Committee meeting.
The property tax levy collected by Aurora this year, which was approved by the Aurora City Council last December, also saw an increase over the previous year. But, because of an increase in the assessed value of property within city limits, the tax rate was expected to fall to its lowest since 2009, according to past reporting.
Assessed value is again going up this year, Peterson’s presentation on Thursday showed, but the tax rate is still seeing an increase.
That increase isn’t to pay for operational costs, according to Peterson. Instead, it is to meet required funding levels for police and firefighter pensions plus because of higher debt payments, she said.
The portion of the property tax levy set to go toward police pensions could increase by around $2.4 million, for a total amount of nearly $23 million. The portion going toward firefighter pensions is set to increase by $1.8 million, for a total of around $16.4 million.
The city doesn’t control these amounts, Peterson said.
Debt repayments, though, saw the biggest increase, Peterson’s presentation showed. At a total of nearly $12.7 million, the debt service levy is set to increase year-over-year by almost $6.9 million.
Laesch said during his inauguration speech in May that past mayors’ efforts to revitalize downtown have left the city in “serious debt,” and because of even more debt the city needed to take out in order to cover previously-approved projects, the city was probably going to see “yet another property tax increase.”
He then said at a town hall in July that the city was set to spend an extra $7 million next year in paying off its debt, which had reached $327 million. The total amount the city needed to pay each year going forward was $27 million, which included principal repayment and interest, he said at the time.
The Aurora City Council has approved over $100 million in additional debt this year and late last year through the sale of bonds to finance construction projects from new fire stations to renovations at RiverEdge Park. Though some of the debt was taken out under Laesch’s administration, all of the projects to be funded through the bonds were approved by the Aurora City Council under former Mayor Richard Irvin.
While Aurora is required to back its debt with the promise of property tax funds, the city regularly uses other funds to “abate” some of the debt service levy, which lowers residents’ property tax bills.
Peterson proposed on Thursday abating roughly $14.9 million in debt payments that otherwise would need to be paid by property owners next year. That money will come from the city’s gaming tax, real estate transfer tax, hotel tax, stormwater management funds and capital fund, among other places, she said.
The Finance Committee on Thursday also unanimously recommended the abatement for approval.
Even with the proposed abatement, that leaves nearly $12.7 million in debt repayments for property owners to pay, according to Peterson. She said that, in past years, Aurora abated all but around $4 million of its debt service levy.
Last year, that number went up to $5.8 million, her presentation showed.
As for the amount of property taxes going toward day-to-day city operations, that’s actually going down, according to Peterson’s presentation. She said the city won’t even be increasing it to account for new construction, which is keeping the property tax rate lower than it could have been.
The city of Aurora is proposing cutting millions of dollars and around 135 positions in next year’s general operating budget. A previous presentation by Peterson showed that property taxes make up around 37% of the revenue for that fund.
rsmith@chicagotribune.com
