12/27/16 - Mayor's Column: Comparing Property Tax
At the December 19, 2016 City Council Meeting, the O’Fallon City Council approved the annual levy for the City of O’Fallon and O’Fallon Public Library. There has been a lot of misinformation spread through social media about this, so I want to take some time to answer questions and provide some clarity.
Please keep in mind that the O’Fallon City Council decides the levy for the City of O’Fallon and O’Fallon Public Library only. All of O’Fallon’s other taxing bodies, such as St. Clair County, O’Fallon Township, and O’Fallon’s school districts, set their own property tax levy and the City Council has no control over their decisions.
The 2016 levy that the Council voted to approve included a 4.93% increase. The majority (91.7%) of the increase will go to help continue properly funding the O’Fallon Public Library and O’Fallon Fire Department. Property tax is the main funding source for both of these entities.
The increase approved by the City Council does not mean that your total property tax bill will be going up 4.93%. The amount of property tax paid to the Library and City of O’Fallon (which includes the Fire Department) makes up less than 2% and 11% of your total tax bill, respectively, so increases in these have a much smaller impact. The total property tax levy will go up approximately 0.3% to fund the library and 0.2% to fund the fire department.
There is no one that can deny that property taxes are unpopular. Fortunately, O’Fallon is lucky to have a large sales tax base, which means that the City of O’Fallon does not have to rely on property taxes to fund basic city services, like police and streets. In fact, property tax in O’Fallon pays for only 2% of the City of O’Fallon’s total budget.
It has long been the policy of the City Council to fund the budget from sales tax and other revenue sources rather than property tax. For every $100 in property tax an O’Fallon taxpayer pays, the City of O’Fallon receives only $10.40. This means that the other $89.60, or 89 percent, of a property tax bill each person pays, can be used by the other taxing bodies in O’Fallon, like O’Fallon Township and Road District, St. Clair County, and O’Fallon’s school districts, to pay for the services they provide.
How does O’Fallon compare to some of the other Cities in St. Clair County? Using the median O’Fallon home value ($179,000) as a comparison, a taxpayer in St. Clair County pays an average of $1,107 in property tax to the city or village they live in. O’Fallon taxpayers pay $518, approximately 47% of the average.
How does O’Fallon rank in comparison to the largest communities in the area? We used the average O’Fallon home price again to calculate and compare how much property tax each taxpayer pays to cities around the area (with population over 20,000) and ranked them from highest to lowest:
- East St. Louis: $1,912
- Alton: $1,604
- Granite City: $1,536
- Belleville: $1,222
- Edwardsville: $778
- O’Fallon: $518
Not only is the City of O’Fallon’s property tax revenues lower than the state and county average per capita, but O’Fallon’s ratio compared to the state average has also decreased. In 2002, O’Fallon’s property tax revenue as a percentage of the average was 68% and by 2012 was only 53%. This means that over the years, O’Fallon is increasingly funding City operations by revenue sources other than property tax.
Your elected officials understand that property tax is not an endless pot of money and that every one of you, as tax payers, has the right to know where and how your tax dollars are being spent. I encourage you to visit the City of O’Fallon’s Finance Department’s website at http://www.ofallon.org/finance-department. On this site, you can view the City’s annual budget, audited financial reports, treasurer’s reports, and warrant reports – which is a list of payments made by the city, and approved by the City Council at every City Council Meeting.
Structured growth, fiscal responsibility, and a bright future are yet further examples of why O’Fallon is such a great community in which to live.