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 Elmhurst homeowners will see the
city portion of their property tax bills go up in 2018, as the Elmhurst City
Council has passed a $300,000 increase in the city’s property tax levy,
according to the Chicago Tribune. This amounts to an increase of 3.1 percent in
the city portion of homeowners’ property tax bills, in addition to an increase
in the public library’s portion of the bills.
It’s the city’s first increase in its property tax levy in four years.
The city’s property tax levy will increase to $10.2 million, up from $9.9
million. The city will use the revenue to contribute an additional $300,000 to
Elmhurst’s police and fire pension funds.
Alderman Kevin York, who chairs the City Council’s Finance Committee, said the
increased contributions were required under state law and actuarial guidelines,
according to the Tribune.
 The Elmhurst City Council had been reducing residents’ property taxes for three
years prior, and for good reason.
Elmhurst sits on the border of Cook and DuPage counties, both of which rank in
the top 10 counties for Illinois’ highest property taxes. Cook County ranks
eighth-most expensive in Illinois when it comes to property taxes, with a median
bill of more than $4,500 annually, according to 2011-2015 data from the U.S.
Census Bureau. However, homeowners in DuPage County have the second-highest
median property taxes in the Land of Lincoln, paying more than $6,200 a year.
Nationwide, DuPage homeowners pay the 27th-most expensive median property tax
rates in the country.
Unfortunately for Elmhurst homeowners, the city’s portion of their property tax
bills is most likely to grow due to increasing costs for Elmhurst’s police and
fire pension funds.
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Elmhurst’s fire pension
fund has less than 68 cents on hand for every dollar owed in future
benefits, even though taxpayer contributions to Elmhurst’s fire
pension fund increased by nearly 33 percent from 2012 to 2016.
Despite the large increase in taxpayer investment, the pension
fund’s funding ratio increased by just one percentage point – up to
67.7 percent in 2016 from 66.7 percent in 2012.
Elmhurst’s police
pension fund is in worse shape, even though taxpayer contributions
have increased by more than $1 million since 2012. From 2012 to
2016, taxpayer contributions increased by more than 56 percent, but
the funding ratio went down to 64 percent in 2016 from 67 percent in
2012.
Elmhurst and other towns like it should have the choice to move away
from costly pension funds. One alternative would be retirement plans
modeled on the State Universities Retirement System’s 401(k)-style
plan. The plan has been operating for nearly two decades, and more
than 20,000 state university workers have opted out of traditional
defined-benefit pensions in favor of the 401(k)-style plan.
Unfortunately, towns like Elmhurst are mandated by state law to
maintain and fund costly pension plans, meaning taxpayers,
especially homeowners, are ultimately on the hook for pension
failures.
Passing a property tax freeze on homeowners’ actual bills (not just
the levies of local governments) and requiring voter approval for
property tax hikes are two powerful reforms that would go a long way
for families struggling to pay higher property taxes as their own
incomes stagnate.
Unless such reform materializes at the Statehouse, homeowners should
brace for heftier property tax bills.
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