Proposals to keep Waukegan’s real estate tax levy at its current level and glean future tax revenue from the Fountain Square area, including its proposed casino, dominated recent discussions by the City Council.
Before the council heard Mayor Sam Cunningham’s passionate request to maintain the levy at its current amount, the aldermen unanimously approved another step of an effort to create a tax increment financing district at Fountain Square Monday during a virtual meeting.
Cunningham said balancing a budget during the current coronavirus pandemic is a challenge, and committed to maintaining pension obligations at the legal requirement despite less revenue and increased expenses. The estimated proposed levy is $37.36 million, according to city documents.
“Our residents, many of them front-line workers, are facing struggles none of us could have imagined just a year ago,” Cunningham said. “I will not put the burden on homeowners of a property tax increase during a pandemic. The tax levy is not increasing this year.”
No vote was held on the levy. It must go through a formal procedure which starts with a virtual public hearing at 5 p.m. on Nov. 2. David Motley, the city’s director of public relations and marketing, said in an email a vote could be taken at that time.
Members of the public who wish to comment can do so electronically, or by submitting their thoughts in writing to the city, according to city documents.
Funds from the 2020 tax levy will be received in 2021 and used to partially fund the city’s budget for the next fiscal year, starting May 1 and ending April 30, 2022, Motley said.
Cunningham said he is asking city department heads to take a close look at expenses. Making it work will be a team effort between all city officials.
“If we all agree to hold the line on taxes, we’ll also need to agree here tonight to a united front to make the tough decisions come budget time next spring,” Cunningham said. “The short-term sacrifices we make holding the line on property taxes may allow families to stay in their homes, and possibly allow businesses to stay open and operating.”
The lone exception to decreased expenses is the Waukegan Public Library. Cunningham said it should receive the 2.3 percent increase it requested, bringing its allocation in the budget to $4.5 million.
“The Waukegan Public Library offers essential services to our communities, providing important connections to health, housing and literacy resources in our community,” Cunningham said.
While none of the aldermen objected to Cunningham’s proposal, there were concerns over the uncertainty of the future. Alderman Lynn Florian, 8th, said keeping the levy flat removed potential funds should a shortfall occur.
“I’m concerned we don’t know the full ramifications of COVID,” Florian said. “If we did need to fill a gap, we could use this to do that. I’m concerned we won’t have any way of mitigating that down the road.”
Before discussing the tax levy, the council unanimously approved a resolution establishing the draft of a Fountain Square redevelopment plan designating the area as a tax increment financing (TIF) district, along with a joint review board to consider the proposal.
Phil McKenna, a consultant with Kane, McKenna and Associates, Inc., who is helping the city with the proposal, said the TIF district allows property tax revenue generated by increased real estate values to flow into a fund which the city can use to improve the area.
Motley said the joint review board consists of representatives from all taxing bodies — including the city, the Waukegan Park District and Waukegan Community Unit School District 60 — which review the proposal and make a recommendation to the council.
McKenna said generally, in a TIF, property values increase as it is developed, generating additional revenue for the taxing entity. The proposed TIF does not include the current site of Walmart, but will have the city-owned 28 acres which is the site of a planned casino.
Though McKenna said the Walmart parcel is fully developed and may not add much to the TIF if it were included, the casino currently has no value because it is city owned and generates no taxes. Motley said when the casino is built and privately owned, it will provide tax revenue.
“The property tax revenues from that site would become ‘increment’ for the TIF district, which becomes the funding source for the infrastructure projects we want to complete,” Motley said in an email. “Beyond that, any additional business activity in any area draws more and/or new customers, which might go to additional businesses.”
Cunningham made it clear no money from the TIF will go to the casino when it is eventually built and operating. The state is currently deciding which of three applicants will receive a license for Waukegan’s casino.
“Any (TIF) money from the entertainment center, which is going to include a casino, is not going to the casino,” Cunningham said. “That is not going to happen.”
