Does Highland Park Need Tax Hike?

When Highland Park’s City Council began its 2014 budget deliberations over the summer, the intent was a balanced budget with 2013 spending levels and no tax increase.

Then the reality of the state’s pension crisis began to take hold causing Mayor Nancy Rotering and the Council to take a closer look at what they had to do.

One of the results was a 5-2 vote Tuesday to enable the City to increase its property tax levy 7.31 percent which would cause a person living in a home valued at $500,000 to pay $85 more than expended a year ago.

“Unlike the state, we’re not kicking the can down the road,” Rotering said after Tuesday’s City Council meeting. “This will go on year after year,” she added then referring to the City’s portion of pension requirements. She made it clear the state must act on its ongoing pension shortfalls.

Councilman David Naftzger, who with Councilman Paul Frank voted against authorizing the potential increase, thinks Rotering may be kicking too aggressively. The Council plans to pay the 2014 and 2015 requirements next year rather than one year’s worth.

“We don’t need to make our payment due in 2015,” Naftzger said. “We voted to pay 2015 in 2014. A property tax increase should be a last resort. Many people are struggling with escalating costs.”

Though the state controls the pension funds for municipal employees around Illinois, towns like Highland Park must make annual contributions so the City’s workers will have the pension they have been earning throughout their careers upon retirement. The state has been behind for years and the communities around Illinois must be fully caught up by 2040.

Rotering is concerned paying the minimum amount due each year will create an eventual shortfall making draconian measures necessary in the future. She likens the additional amount to paying additional principal on a mortgage rather than the stated payment.

“We’re looking at the costs we will be paying for the next five years,” Rotering said. “Our actuarial assessment is people are expected to live longer and there will be an increased amount (in the future).”

As the Council continues to refine the 2014 budget, Naftzger will push his colleagues to hold off making the 2015 payments as well as other future obligations considered. In his opinion, this will reduce payments in the approximate amount of $800,000 negating the need for the tax increase.

“We are not required (to make) full funding,” Naftzger said. “We need to make a plan for dealing with long term contributions but we don’t need to do so in four years.”

Rotering believes she and the Council majority are taking an enduring approach to the budget while making cuts to avoid a greater tax increase.

“We are cognizant of the economic burden on our homeowners in this economy and the City has cut over $700,000 from our budget to keep our operating budget flat,” Rotering said. “We have to take a short term view and a long term view.”

The public will get to have its say during a public hearing on the tax levy at 7:30 p.m. Dec. 9 during the regularly scheduled City Council meeting.

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