Lincoln City Council
Aldermen vote to increase city share of local property tax levy by $55,000

 

[December 16, 2024] 

At the Monday night meeting of the Lincoln City Council, aldermen voted 7 to 1 to approve an increase in the property tax levy for the 2024 tax assessments payable in 2025. The overall increase will come to just over $55,000 which, when received, will be applied to the pension funds for the Lincoln Police and Fire Departments.

The discussion on the increase began at the November 26th committee of the whole meeting where City Treasurer Chuck Conzo implored the council to consider the increase in the best interest of meeting state mandated requirements for the funding of the pension plans.

For a bit of history, for decades, municipalities throughout the state have recorded the pensions as a liability payable at some point in the future. They used this type of recording to show that the funds were due while not having pensions impact the general funds of the city coffers. It was a common practice and on many occasions the city of Lincoln balanced their budget by not paying in any cash to the pensions plans.

The state has mandated that all those liabilities must be wiped out, and the actual cash that should be in the pensions funds be there by the year 2040. Many municipalities throughout the state are now scrambling to figure out how to raise that much money in the time allotted. At the November meeting, Conzo said that the $55,000 increase would not solve the city’s liability, but it would help. He said that the city needed to start being more proactive in raising the money and replenishing those two pension funds.

Conzo also said that in the big picture, the increase would not be a significant change in taxes due by constituents because the city of Lincoln tax levy is a very small portion of the overall tax bill Lincoln property owners receive. It was noted that when the bill arrives to the property owner, the percentage of tax in the bill that belongs to the city of Lincoln is less than 11 percent. Conzo presented a list of percentages taken since 1999. In the first year on the list, the city share was 14.6 percent of the total bill and has gone down steadily since then, due to other taxing bodies increasing their levies significantly while the city did not.

It was noted by Alderman Kevin Bateman and others that often times the city takes the heat for the tax increases when it is those other taxing bodies who have done the real damage. In spite of this, Bateman was also adamant that the city should not increase taxes for Lincoln property owners. Bateman said he thought the city could easily find $55K in the budget to re-designate to the pensions. Conzo said at a later time, that if the city could find money to put into the budget in addition to the increase of tax levy that would be all the better.

Mayor Tracy Welch talked about what would happen if the city stayed at its previous level as it has in years past. He said that even if the city made no changes, the property taxes for Lincoln constituents would still go up because there are roughly 13 taxing bodies that make up the full tax bill, and nearly all of those entities are asking for more money.

In essence, Conzo said that was correct, and in holding level, the city’s share of the overall tax would likely decrease. On the same note, he said that the increase he is asking for is not a significant amount in the big scheme of things, and that because other entities were seeking increases, the percentage of the total bill going to the city would possibly remain below or at that 11 percent level.

Because the money Conzo was requesting would be earmarked solely for the pension plans, there were questions about how much money the city actually needed to raise for the pensions to be fully funded by 2040. Conzo said that there were actuaries who had been asked to calculate that answer and estimate what the annual contribution should be in order to fully fund the pensions. However, that work was not yet completed, though he was expecting it to be so any day.

In the end the decision to put the increase on the December 2nd voting agenda was tabled pending receipt of that information. The council said they would revisit the topic at the next committee of the whole meeting.

At the December 10th committee of the whole meeting, Conzo added another fact about the property tax liabilities. He said that there has been an increase in taxable property in the city of Lincoln amounting to roughly $18,000,000. Because the city does not seek a flat percentage rate of the total tax but rather a flat dollar amount, the total dollars requested by the city would be spread out according to assessed values of all the taxable properties. This meant that with the increase in properties and those dollar values, the tax levy per property owner in flat dollars could be even less than earlier discussed.

Conzo surmised that the city would gain the $55,000 without property owners seeing much if any increase in the city’s share of their tax bill.

It was mentioned by some of the aldermen that if the city did not increase their request, then what Conzo had just explained would mean that property owners could pay less to the city, the city could hold a lessor share of the total tax, and that would also be good.

In the end, the aldermen all appeared to be leaning toward taking the increase, and the motion to approve the increase was added to the December 16th voting agenda.

On Monday evening when the motion was made, there was no discussion held on the topic, so it went straight to vote. Seven aldermen voted yes to the increase with Bateman being the sole “no” vote.

[Nila Smith]