Cary weighs small property tax hike to fund pensions, operating costs

Cary homeowners could see the amount they pay in property taxes to the village increase if the village board decides to increase the town's levy by about 2%, which was one of the options trustees considered this past week.

The increase would translate to about $4 more in property taxes for the owner of a home worth $300,000, village staff said.

Village staff proposed the increase to account for higher overall operating costs and the expected increase in Cary's contribution to its police pension fund. As of May 1, the amount the village needs to contribute grew by about $30,000 to just more than $1.2 million.

The village is paying out more from its police pension fund than expected because of a retirement, said Heidi Andorfer of Foster & Foster, the company that prepared the appraisal of Cary's police pension fund's assets and liabilities.

"In any given year that retirement occurs, it's generally a loss," she said. "You have gains between the years that you don't have any retirements."

Overall, Foster & Foster found Cary's pension plan experience to be unfavorable, Andorfer added.

The village expects to collect just shy of $2.6 million in property taxes next year if the board approves the 2% increase, which would be about $58,000 higher than last year.

Village Administrator Jake Rife said Cary's tax levy has been about $2.5 million for "quite some time" but noted the village continues to see increases in its police pension funds, as well as with its contracts with employees and health insurance costs.

"I don't see any of those things going in the opposite direction," he said.

At the village's annual budget review, Mayor Mark Kownick said village staff "talked about the rising costs of everything," including $27 million in road projects that need to be addressed.

"We did a community survey," the mayor said. "The number one thing our residents want are good streets."

When looking at the "small incremental gains" to Cary's tax levy, "it is really minuscule," Kownick said.

The increased levy means the village would not have to raise revenue in other ways that would affect residents, he added.

"We can say, 'All right, if we're not going to increase our levy by the $4 a year, we could invoke a municipal vehicle sticker tax at $20 to $25 a car,' " Kownick said, adding that this is something the board has "overwhelmingly" indicated it doesn't want to do.

Trustee Rick Dudek acknowledged that talking about raising taxes is never popular, but broken down to dollars and cents, the proposed increase is "less than the cost of going to McDonald's."

"The village's budget needs every penny it can get," Dudek added. "I would say we pick up the new (property) growth and we pick up the (consumer price index), and we budget to make Cary the best place it can be."

Because the village of Cary is a non-home-rule entity, it is restricted by a state law that limits how much it can increase its levy by each year, tying increases to inflation plus new growth, such as an addition on a home or a new subdivision.

Most village trustees gave their general consensus to advance the 2% levy increase to the Dec. 7 meeting for an official vote.