It’s about time someone asked the city to stop raising property taxes.
At the most recent budget workshop, Evanston Finance Director Martin Lyons presented the council with a new plan that could balance the budget and avoid a property tax hike.
“This plan would mean a zero percent property tax increase without reducing current services,” he said. Last year, the council voted to increase the property tax by about 7 percent. Just two weeks ago, Lyons unveiled the 2009-2010 budget plan, initially calling for a property tax jump of about 5 percent. At the time, Lyons defended the measure by saying, “Evanston is a full-service community.”
In the aftermath of the housing boom, residents are already struggling to stave off foreclosures. As Evanston residents’ home values continue to fall, the last thing they need is an increase in property taxes.
Clearly, decreasing real estate values would severely affect any local government’s budget. In Evanston, a fall in residential real estate sales last year cost the city about $700,000 in lost revenue from the real estate transfer tax, which sellers pay in every property transaction. Because properties are devalued, the few transactions that have been made are at lower dollar amounts.
But in Evanston’s case, the city is in an especially precarious financial position because of its own neglect to properly fund police and fire pensions. Although city officials blame former city actuary Ted Windsor for underfunding the pensions by $140 million, council members shouldn’t put the burden of payment on blameless Evanston residents with their own financial woes.
Before Windsor was replaced in 2006, he supported council decisions to not raise property taxes, saying the pension funds were healthy. In reality, Windsor misrepresented the city’s liability, calculating unrealistically high expected returns on the city’s investments and using an incorrect retirement age in his assumptions. But who was to hold Windsor responsible for his duties, if not city officials? Few – if any – asked questions, and Evanston residents shouldn’t be forced to make up the difference.
Since Lyons touts Evanston as a “full-service community,” the city doesn’t have to cut services. Instead, city officials could look into charging fees for some of the city’s illustrious services, thereby properly judging demand and creating an implicit tax. If the city provided fewer services as free public goods, Evanston officials could more efficiently charge for services. Residents lacking funds in this economic crisis wouldn’t be forced to pay these fees; they would simply forego certain services.
At least with service charges, residents could keep their houses. With another increase in property taxes, some Evanston residents are beginning to worry about becoming homeless.
Another option would be pairing with other North Shore communities to provide common services. When certain services are pooled or provided on a larger scale, cities can cut costs. Evanston could either charge other neighboring towns for use of its equipment, or contract out.
Money doesn’t grow on trees, and no alternative is perfect. But a property tax hike shouldn’t be used as an easy fix before evaluating other options.