Cary looking at three options for property tax levy

The Cary Village Board is set to approve at its Dec. 15 meeting one of three options for its upcoming property tax levy, which range from a flat levy to a proposal that requests the maximum allowed under the state tax cap.

The village is subject to a state cap on how much it can increase its property tax levy each year, a formula that is tied to inflation and the value of new construction in the village's boundaries.

Taking the maximum - both inflation and new growth - would mean a 2.3% increase over last year's levy extension of just over $2.5 million, while only taking new construction would mean a 0.32% increase, according to a report from Finance Director Michael DuCharme.

DuCharme recommended during a November committee of the whole meeting that the village board request only the increase from new construction, noting it would not affect existing residential and business property values.

At that meeting, Trustee Jeff Kraus said he supports the new growth option, while Trustee Kim Covelli said she would not support an increase to the tax levy.

Any new growth would be paid by new taxpayers coming on the tax rolls, DuCharme said. About $8,190 is estimated in new property value.

While DuCharme said it may not seem like a lot, the village would receive property taxes off that new value each year going forward in perpetuity. If Cary doesn't capture the increase this year by increasing the levy, it forgoes that forever.

Requesting the full increase allowed - both inflation and new construction - would mean a slight increase on a residential taxpayer, he said.

Regardless of the decision the village board makes later this month, property owners may still see their tax bill go up, DuCharme said. That's because other taxing entities, such as school districts, levy separate from the village.

DuCharme also warned this means that, at some point in the near future, Cary's levy will go almost completely toward police pensions. This would mean the village would have to fund everything else from other resources in the general fund.

In a budget update earlier in the meeting, DuCharme told village trustees that when the COVID-19 pandemic first hit the area, he expected the village would lose close to $1 million, as some revenue sources might not perform as well as expected.

Six months into the budget year, however, DuCharme said the village was actually performing better than expected as it tried to hold down expenses. With more than $700,000 from the state's COVID-19 package, the village could potentially see a surplus of $500,000.

However, DuCharme said, he still has some concerns, including how things will go in December, January and onward.

"Even though we're showing a surplus for this year, I will tell you right now, our biggest struggle will be putting next year's budget together," DuCharme said. Also a concern, he said, are the rising pension costs, as well as annual wage and benefit increases.

Village Administrator Jacob Rife noted these factors are not unique to Cary.

"Every community is facing those challenges," he said.

Mayor Mark Kownick called the village a "lean and mean operation" and said he has full confidence the village will make decisions needed to continue providing services for residents and businesses.

"We're not alone in this," Kownick said. "In all the conversations I've had with other mayors and their staff as well, these are very common situations."