Homewood officials presented village trustees with 2025 property tax levy options to assist with pension funding requirements.
As higher pension and insurance costs continue to put pressure on the General Fund, Homewood Village Manager Napoleon Haney, Finance Director Amy Zukowski and Assistant Finance Director Lindsay Cabay explained the background and options at the Nov. 25 meeting.
According to staff, the board can keep the tax-capped portion of the levy flat or raise it by 3.4%, which is the maximum allowed under the state’s Property Tax Extension Limitation Law. Staff recommended the 3.4% increase, saying the extra money would help cover rising operating costs.
The need to increase property tax is due to Illinois requiring local police and fire pension funds to reach 90% funding by 2040. Homewood’s Police Pension Fund currently is funded at 55%, and the Fire Pension Fund is at 72.2%. The village must contribute $2.98 million to the police fund and $985,580 to the fire fund next year to stay on track. Together, that is a $473,939 jump, a 14% increase over last year, Cabay said.
The higher pension payments reduce how much money is left for the General Fund, which supports everyday village operations such as administration and public works, plus insurance costs, Cabay said.
Under Option 1, the total levy would be $7,743,725. This option keeps the tax-capped portion the same but leaves about $237,490 less funding for General Fund needs. Under Option 2, the levy would rise to $7,981,293, a 3.4% increase based on a 2.9% consumer price index. The additional dollars would help maintain current service levels, which is why staff recommended Option 2 to the board, Zukowski said.
According to Haney, only 11%, or 11 cents per dollar, of a homeowner’s property tax bill goes to Homewood.
“That 11% is relatively low compared to our counterparts,” Haney said. “A lot of communities are more dependent on property tax than Homewood.”
Property tax revenue in Homewood only funds $1 million out of the $27.7 million in the village’s General Fund. Sales tax is the main revenue that supports the village’s needs, Zukowski said.
“I did the math on my own property taxes,” Trustee Lauren Roman said. “My property taxes are $12,757 a year. If the assessed value stays the same, with this 3.4% increase, my taxes would go up $6.50.”
The 3.4% is just of the village’s 11% share, and does not account for general property tax increases that other taxing bodies may impose, Zukowski said.
Based on the presentation, the board unanimously stated that they are in support of Option 2. Staff recommends publishing a Truth in Taxation hearing notice before the Dec. 9 meeting, when trustees are expected to vote on the final levy.
