Fiscally Speaking / Government / Maywood Politics

Maywood Approves 13% Overall Tax Levy Increase, 3% Increase for Corporate Fund

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A chart detailing the village’s 2016 tax levy. | Village of Maywood

Friday, December 13, 2016 || By Michael Romain || @maywoodnews

At a Dec. 20 regular meeting, the Maywood Board of Trustees unanimously approved an ordinance setting the real estate tax levy for 2016 at $18,891, 952, which represents a roughly 12 percent increase over the 2015 tax levy amount of $16,883, 378.

Most of that increase, village officials have noted, is due to the village paying more into its police and fire pension funds. State law requires the village to make annual contributions that would increase funding levels to a 90 percent “fully-funded” threshold by 2040, according to an October memo by village attorney Michael Jurusik.

Tax levy requirements for the fire pension fund increased from $2,428,188 last year to $2,601,079 this year — an increase of 7 percent. Tax levy requirements for the police pension fund increased from $2,533,343 to $4,013,846 — an increase of 58 percent.

Those increases, village officials have noted, are based on unfunded liability, “which represents monies that should’ve been in the fund and demographic factors that have changed to include the hiring of new employees, employees retiring or becoming disabled and salary increases.”

During a Nov. 30 Legal, License and Ordinance Commission (LLOC) meeting, Village Manager Willie Norfleet said that the levies for the village’s pension and debt service funds are virtually set in stone and the board has no power to alter them.

“There are no options for reducing or modifying the police and fire pension funds or the debt portion,” he said.

During that Nov. 30 LLOC, village attorney Michael Jurusik added that, if the village doesn’t properly fund its fire and police pensions, the state could enact harsh penalties.

“You have to make that payment because it is required by state law and there’s a penalty, because if you don’t, other money coming from the state that the village has budgeted to pay bills with will be taken and put into the pension fund,” Jurusik said. “It will put the village in a bad hole because you will be short paying your other bills and services.”

Jurusik said that “the village is not alone” in maintaining unfunded fire and police pensions, adding that he isn’t aware of any municipality whose fire and police pensions are fully funded.

“The reality is that this is an issue across the state,” he said.

The board, however, does have the power to adjust the level of tax levied for its corporate fund, which village officials had recommended be increased by $591,967, or 5 percent over last year’s level. The board, instead, voted to increase the corporate fund to 3 percent over last year’s level, or from $11,839,347 to $12,194,527.

In 2015, the board voted for a 3 percent increase despite recommendations by village staff members to increase the levy by 5 percent.

Lanya Satchell, Maywood’s director of finance, wrote in a November memo that her recommendation for a tax levy increase was based on additional funds necessary to address numerous issues, such as an additional $200,000 over what’s currently budgeted for tree removal, $500,000 in matching grant funds necessary to secure a $2.5 million grant for street repairs and more than $290,000 in automatic wage increases for some village employees.

An increase in the property tax levy doesn’t automatically mean an increase in the property tax rate. The levy is simply the total amount of property taxes the village “must collect to balance its budget, after accounting for all other revenue sources including state aid. The tax levy is the basis for determining the tax rate” but it’s only one component for calculating a homeowners’ property tax bill, according to one primer on the subject. VFP

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