Finance Committee runs out of time to set 2024 property tax rate, must return next week to finish

QUINCY — Comptroller Sheri Ray asked the five members of the Finance Committee for guidance during their meeting before the Quincy City Council meeting.

Ray ran out of time before she received an answer.

Ray asked for a motion or direction from the committee to show support for a Truth in Taxation resolution and hearing, which is necessary if the increase in the 2024 property tax rate exceeds five percent. Getting that motion would have allowed Ray to prepare a resolution to be placed on the agenda for the Quincy City Council’s Nov. 26 meeting, with the goal of having a vote on the tax rate during the Dec. 16 meeting.

“I just know for the purpose of preparing the Truth in Taxation resolution, I’d like for you guys to maybe give me a number here,” Ray said. “If you think $8.3 (million for the total tax levy) is too high, I can back it down and we’ll just work with that number.

“If you guys give me guidance to go above the five percent, I would prepare that resolution and it would come to City Council next Monday. But the thing is, you’ve got to advertise it. Your public hearing has to be so many days prior to the adoption, and you got to advertise the public hearing five or seven days ahead of the hearing.”

However, the five committee members — Eric Entrup (R-1), Tony Sassen (R-4), Mike Rein (R-4), Richie Reis (D-6) and Jack Holtschlag (D-7) — couldn’t agree to the minimum five percent increase in the tax rate before walking out of a conference room to attend the City Council meeting down the hallway. 

That means the committee must meet again next week and finalize the tax rate so the City Council can vote on it Dec. 23 — two days before Christmas.

“We need to make that small increase or something, because I think otherwise, the next year, we’re going to be looking at this large increase again,” Entrup said. “We’re going to look at a 25 percent increase. It’s going to get bigger.”

Director of Administrative Services Jeff Mays said after the meeting that the Finance Committee has allocated $5 million from surpluses during the past three years to keep property tax rates low.

“I think the folks around this table are very sensitive to the property taxpayer,” Mays said after the meeting. “They want to keep the property tax hit on our residents low. We don’t want to have an over-reliance on the property tax.

“By the same token, those things that we fund with the property tax — pensions and the library — are going up. So how do we find the middle ground? Do we keep the levy low and actually lower the levy so that we’re under the five percent? Reducing our levy so (the tax rate) does not exceed five percent will require a further fund balance of almost $2.2 million.”

City officials are expecting a jump in the equalized assessed value (EAV), but they also predict personal property replacement taxes (PPRT) — which help fund police pensions, fire pensions and the Quincy Public Library — will fall.

Ray gave three scenarios to the Finance Committee:

• PPRT taxes remaining flat (with a 9.56 cent tax rate for $100 of a homeowner’s EAV);
• Increasing by 10 percent (with a 9.71 cent tax rate for $100 of the EAV);
• Falling by 10 percent (with a 9.43 cent tax rate for $100 of the EAV). 

Ray suggested being conservative and expecting PPRT taxes to fall by 10 percent, meaning property taxes would have to increase.

Quincy Mayor Mike Troup told the committee the state is preparing for a $3 billion budget shortage.

“(The state is) going to have more pressure than ever to scale back what they share,” he said.

Kathleen Helsabeck, director of the Quincy Public Library, submitted her budget request of $2.35 million — a slight increase compared to last year’s $2.09 million budget. She asked the Finance Committee to consider increasing the property tax rate above 10 cents to alleviate the financial burden.

Ray said she plans for the city pensions to be budgeted at 104 percent, as the city has done for the past six years.

“I think Alderman (Jeff) Bergman (R-2nd Ward) said it last week (during the City Council meeting) that pensions are going to continue to just eat up more of the pie,” Ray said. “But we have no control over that.”

“They’re going to consume us,” Rein said of the pensions. “They’re going to shut the city down.”

Holtschlag made a motion to create the Truth in Taxation resolution, but none of the other four committee members seconded it. 

“There’s no way it’s not going to go up five percent,” said Kelly Mays (R-3rd Ward), who attended the meeting but is not a committee member.

“We would have to basically just use fund balance (to keep the property tax rate down) …” Ray said.

“ … until we’re really in rocky shape,” Mays said, completing Ray’s sentence.

“We’ve been using fund balance surpluses from our sales taxes (to keep the property tax rate down) because we’ve been growing our PPRT,” Mays said after the meeting. “We’ve been using those to keep the property tax hit on our people as low as possible. But at some point, you’re drawing the fund balances down, and you’re not going to have the capacity to continue. I think we may have the capacity to continue one more year. But then what?

“The bottom line is, we’ll have to have another discussion. It was a good discussion tonight. I think (the Finance Committee is) getting their arms around it, and we’re getting some direction.”

Just not enough to avoid that vote two days before Christmas.