Despite a substantial deficit in the police and fire pension funds, several top Evanston officials said the proposed 15.15 percent property tax increase likely will be reduced.

“The increase is more than some people can handle,” Ald. Elizabeth Tisdahl (7th) said. “If we raise property taxes, it forces some people to leave.”

Tisdahl introduced the Feb. 5 referendum to raise the city’s real estate transfer tax. The revenue generated from the transfer tax, which will be earmarked for the pension funds, would allow the city to lower the proposed increase of the property tax by 2.5 percent, she said.

A possible decline in Evanston’s socioeconomic diversity has been a recurring concern about the tax hike.

“The people who will be hurt the most are those who are having a hard time staying in Evanston,” said Ald. Edmund Moran (6th). “It could be the straw that breaks the camel’s back.”

Moran predicted that the tax increase will be lessened, but added that “only time will tell.”

Ald. Steven Bernstein (4th) said he fears that increasing the cost of living in Evanston would make it a place in which “only the elite could afford to live.”

“I believe that the council will work towards lowering the tax,” said City Manager Julia Carroll, who introduced the increase in her proposed 2008-09 budget.

Carroll agreed with Tisdahl that the transfer tax increase would help lower the property tax.

Businesses would be affected more than residents, because properties used for commercial purposes are assessed at a doubled rate in Cook County, said Jonathan Perman, executive director of the Evanston Chamber of Commerce.

When an Evanston resident pays property taxes, about 20 percent goes to the city government. An additional 65 to 70 percent funds the local school districts, and the remaining 10 to 15 percent is distributed in various other ways, Perman said.

Each year, the school districts raise their portion of the tax to meet the rate of inflation, which is about 4 percent. Together, the 15.15 percent hike applied to the city’s portion of the taxes, and the 4 percent jump from the schools would result in an about 6 percent total increase in each individual’s property tax, according to Perman.

“It’s too much for businesses and residents to absorb,” Perman said. “Few people will get a 6 percent raise this year. In fact, real incomes (adjusted for inflation) are going down.”

Perman suggested that the city should lower its proposal so that the total tax increase matches the rate of inflation. He estimated that this would require the council to cut its desired tax increase in half.

The council will hold its next budget review meeting at 9 a.m. Jan. 26 at the Evanston Civic Center, 2100 Ridge Ave.

Reach Sean Walsh at [email protected].