Homewood expects 4.8 percent property tax hike

Time to read
1 minute

Homewood expects 4.8 percent property tax hike

October 29, 2020 - 19:55

Homewood expects to raise real estate taxes by 4.8 percent, Finance Director Dennis Bubenik explained to the village board Tuesday, Oct. 27. 

The total 2020 property tax levy for village operations, pension obligations and debt service would increase 5.4 percent to $6,737,322.

The village is one of several bodies, including the school districts and libraries, that levy property taxes. Homewood’s portion of the tax bill is about 10 percent. 

Bubenik used an example of a property with a $6,000 tax bill. The village would receive about $600 of that. The expected bump would be about $32.

The village is legally allowed to increase its portion by the consumer price index change plus the change in new construction value annually. 

The CPI in 2019 was 2.3 percent. The value of new construction won’t be known until summer of 2021 so the village is required to make its best estimate. Homewood officials set that number at 2.5 percent. 

Real estate taxes help fund the village’s day-to-day operations budget as well as its pension obligations.

The tax levy funds 11 percent of Homewood’s general fund, according to Bubenik. Caps set by the state have limited increases over the past 10 years to just over $1 million in total. During that time, the pension fund demands raised almost $1.7 million.

During that time, the pension fund actuary calculated requirement increased almost $1.7 million. The village's tax capped levy is split between day-to-day operations and pensions, and a greater portion of the levy has been shifted to pensions.

"As a result, the amount of the tax levy available to pay for village operations decreased from $2.8 million to $2.2 million over that span," Bubenik said.

Debt requirements are not subject to the tax cap rules. That amount is set at an amount to pay the coming years principal and interest — $642,324. 

Homewood paid off a 2017 bond with a 1.95 percent interest rate this year and replaced it with another with a 0.85 percent rate, a savings of 43.6 percent over the next three years.