STERLING – Sterling City Council members voted to increase the city’s tax levy by almost 7 percent at its meeting Monday night.
Under the new levy, a resident with a $100,000 house will pay $41.64 more in property taxes next year. The council voted 4-1 to pass the increase. Voting for the proposal were Aldermen Retha Elston, Joseph Martin, Lou Sotelo and Amy Viering. Alderman Barry Cox voted against the increase.
The city raised the levy to meet the demands of soaring employee pension costs, city officials have said.
During a public hearing before the vote, three residents voiced their opposition to the levy increase.
Earl Stevens questioned the timing of the increase.
“My opinion, to raise a property tax, you need only look around and see the foreclosures taking place the last 2, 3 years in this town,” Stevens said. “Not only that, but you look at the properties that are now up for sale, and each time these properties are sold, the first question is asked is what the property taxes are.”
John Stauter, who will be a candidate for alderman at-large in April, said he attended a meeting 2 years ago at which the city also raised taxes.
“At that time, you said you’d done everything you could to not do it, so we raised taxes,” he said. “Two years later, we’re here for pensions, basically.
“My big question is: what are the plans? Have you talked about any proactive plans going forward? Because if the state of Illinois shifts any of the burdens for pensions to our school district, my taxes are going to up and my taxes are going up for this pension.”
Stauter wondered whether the city would be in a similar position next year to have to raise taxes again.
Sterling City Manager Scott Shumard said next year’s levy will be determined by how investments perform and the level the state sets for benefits.
“The state sets the age; the state sets the amounts; the state sets the contributions from the employees,” he said. “Unless the state changes something, there’s very little the city has under its control other than to reduce the [number of employees].”
Until the state takes proactive actions to change the pension funding system, the problems will continue, Shumard said.
Resident Michael Keefer said a property tax increase might drive him out of Sterling.
Cox said he encourages residents to knock on the door of representatives in Springfield to alert them to the need for solving the pension crisis.
“We gotta take it back,” he said. “As all of you sit out there, we can’t keep dipping into the pockets. I can listen to you here, but you guys gotta be helping us down there, too.”
After the meeting, Shumard said the city has to “hold out hope the state makes the right choices and does something to reform the [pension] system as it stands.”
“Part of this will change when the investment climate changes and the portfolios start to rise again,” he said.
Nearly 80 percent of the city’s general fund goes to personnel costs, such as wages, health insurance, pensions, and required training, Shumard said.
“The remaining 20 percent of the budget makes it very difficult to cut from, because then you’re talking about everything from electricity to run street lights to general liability insurance,” he said.
Shumard said the decisions are very difficult, and always open for public debate.
“Hopefully there’s more momentum to do something jointly [in consolidating services] with Rock Falls, because I don’t know how you cut people anymore, I really don’t,” Shumard said. “We’ve hired people additionally for utility billing; we’re going to more part-time workers so we’re avoiding the benefit costs.