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DeKalb's committee recommends 4% decrease for 2019 tax levy

DeKALB – DeKalb homeowners could see a decrease in the amount they need to contribute to the city on their tax bill in the spring.

The city’s Finance Advisory Committee recommended the city adopt a tax levy for the coming year that would decrease the levy by 4%. The committee met Monday to begin first round budget talks as the city moves into its budget planning season.

For the proposed 2019 tax levy, the committee recommends capturing equalized assessed value of homes at 2%, documents show.

The citizen-led Finance Advisory Committee has no policy-making power, but can make recommendations on the budget, which are then presented to city council for review, after which time the council votes on how to move forward financially.

Preliminary drafts of the fiscal 2020 budget tally the numbers at $104 million, with an operating fund of $38 million, a $61 million pension fund, and a $2.4 million funding gap for road repairs, City Manager Bill Nicklas said Monday.

Nicklas and the rest of the city staff will work to complete a full budget draft by Nov. 15, after which time he plans to hold a two-night workshop with the advisory committee and council to establish priorities. The budget will then move to a public hearing and council vote in December.

Nicklas said the option would lower the city portion of a homeowner’s overall property tax bill. Pending final approval by city council, the tax levy would decrease 4%, costing $1.14 per $100 of EAV, Nicklas said.

The city council will hold a levy discussion at their Committee of the Whole meeting Oct. 28.

The city also has significant infrastructure and capital needs that have not yet been addressed because of budget constraints, documents show.

Funding options the committee and council will consider include a property tax increase (the 2020 budget proposes a 1.2% city tax rate and a $7 million tax levy), a 0.25% Home Rule Sales Tax or a local fuel tax increase up to 4%, documents show.

As of January 2019, city staff determined 25 miles of DeKalb roads, mostly residential areas, needed “immediate maintenance to prevent rapid degradation,” documents show.

Only 2.75 miles received that maintenance, and city staff are concerned road repairs needed will again exceed the budget.

The 4% proposed motor fuel tax increase would cut the $2.4 million funding gap for road repair by 28%, documents show.

The current local fuel tax has a rate of 5.5% per gallon and is split between roads and airport expenses, documents show. Projections expect the tax to fund $695,000 for roads, documents show.

For every two-cent increase, the local fuel tax is estimated to produce an additional $345,000 in revenue, which would go to capital spending, specifically allotted to repair failing roads in the city, Nicklas said.

Source: The Daily Chronicle

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