Schaumburg considering the 13th year of a property tax levy without an increase

Schaumburg trustees Tuesday will consider approval of a tentative property tax levy of $19.5 million, where it has been since a 5% reduction in 2019 and a continuation of efforts to avoid an increase since its introduction in 2009 during the Great Recession.

Schaumburg Mayor Tom Dailly said he thinks the village will be able to maintain that effort for some time to come.

"I think the village is in a strong financial position," he said. "Retail has come back."

Finance Director Lisa Petersen said a $2.3 million increase in the village's annual contributions to police and fire pension funds - newly consolidated with those of other municipalities - is the chief reason for the recommendation to keep the levy stable rather than reduce it.

Even with that, the village will use reserves to make up what property taxes can't provide for the pensions. The reserves will be strengthened by the effect of inflation on consumer taxes, because when prices are higher, the sales taxes paid also are higher, generating more revenue.

"We think it's a prudent use of the reserves," Petersen said.

Inflation is both a blessing and a curse for some local governments because of its impact on revenues and costs.

"For government, the blessings come before the curses," Petersen said.

Since the paying off some bond debt four years ago, the property tax levy has funded only police and fire operations and pensions. The village's other departments receive all their funding from other sources, Petersen said.

This year's planned levy would provide nearly $6 million for police pension contributions, with another $987,432 coming from reserves. The levy would fund a little more than $5 million for firefighter pensions, with another $1.3 million coming from reserves.

Together, police and fire pension contributions costs have increased about 4% annually over the past seven years, Petersen said. Next year will see another increase, but she believes it won't be as much as this year's.

The levy is expected to generate $8.4 million for Schaumburg's police and fire operations, with additional funding coming from other revenue sources.

One of the financial pressures from the consolidated police and fire pensions is the state's requirement that they be 100% funded by 2040.

Dailly said there is some lobbying under way to move that goal to 2050, which would provide some relief for municipalities. He believes there is no practical reason for the pension funds to be 100% funded, as not every department member will retire simultaneously.

The village board is scheduled to cast its final vote on the proposed 2022 levy Dec. 13.