The Naperville City Council next week will begin work on a proposed $303 million budget for the fiscal year beginning May 1 that will rely more on sales taxes and state income taxes and less on property taxes.
Some City Council members, however, already are saying the proposal, which was made public Thursday, does not go far enough in reducing real estate taxes.
The city projects that sales-tax revenue and its share of state income taxes will be up compared with last year’s. The budget also shows a slight decrease in the city’s property tax rate, but some elected officials want more property tax relief.
City Councilman Richard Furstenau said Thursday that he intends to ask the council to shave a dime from the current property tax rate of nearly 88 cents per $100 of a home’s equalized assessed value and send staff back to the balance sheets to figure out to pay for it.
City Councilmen Mary Ellingson and David Fiore said that perhaps it is time for the city to enact another tax to offset the reliance on property taxes, such as a local sales tax or a tax on food or beverages. As a home-rule community, Naperville can levy local sales taxes.
“This may be a ripe year for some of those things to happen,” Fiore said.
The council will work on the proposed budget during workshops beginning next week. Final approval probably won’t come until April.
The $303 million figure represents a 7 percent decrease in spending from the current budget, projected to top $326 million by the end of April. The reduction is primarily due to decreases in spending on electric, water and wastewater utilities.
About $93 million of the proposed budget is earmarked for the general fund, which pays for the city’s day-to-day operations such as police and fire protection and the Public Works Department. The remaining $210 million pays for items such as municipal utilities, the library, debts, pensions and other obligations.
The city intends to pay for part of the budget with sales tax receipts, which are projected to grow 6 percent to nearly $25 million, thanks to car dealers and stores expected to open in the next year. Also, utility taxe income is projected to climb by 5 percent to $16 million, as are state income tax receipts.
Still, the general fund will rely on $16.6 to $19 million in property taxes, depending on where the council sets the property tax rate for the next year. Staff has recommended a rate of about 85 cents per $100 of a home’s assessed value, a decrease of about 3.5 percent from the current rate.
