PRINCETON —áThe city of Princeton plans to levy taxes at a 2 percent increase over last year. The city council on Monday unanimously approved the first reading of an ordinance adopting the levy, which comes with a 96-cent tax rate.
City manager Rachel Skaggs said levies for the fire and police pensions changed this year’s overall levy plan when they came in at about $200,000 more than last year.
The city plans to levy $414,644 for fire pension and $353,326 for police pension. Currently, Princeton’s police pension is funded at 74.34 percent and the fire pension at 62.33 percent.
“There is a state mandate that those have to be fully funded by 2040, and it’s something that I am going to be working on over the next six months or so,” Skaggs said.
To help ease the burden of those big increases, a closer look was taken at other levies to see where reductions could be made. It seems the city’s general fund will take the biggest hit, with a 40 percent decrease, or about $160,000, Skaggs said.
The general fund is the operational budget for police, fire and streets.
“This will be an issue when we address the budget for the upcoming fiscal year,” Skaggs said, adding she also will be looking into changing the city’s fiscal year, which runs from May 1 to April 30, to a calendar year, which would run from Jan. 1 to Dec. 31.
The change would allow the tax levy and budget to be done at the same time. Skaggs hopes to make this change this coming year or the following year.
Mayor Joel Quiram said municipalities facing pension problems have been in the news lately.
“It’s affecting communities throughout the state of Illinois. It’s a problem,” he said.
Quiram pointed out that Geneseo plans to raise its tax rate 20 percent and LaSalle 14 percent to cover pensions. Peoria is laying off 27 municipal employees to counter its pension problems, he said.
“There’s problems of this throughout the state, but I think we have a pretty good handle on it,” he said. “Unfortunately … $160,000 shortage in our general fund —áthat’s basically what our yearly street budget is, so that makes our referendum coming up in April all the more important.”
Quiram was referring to the proposed one-quarter percent sales tax increase the city will be asking voters to approve on April 2 to help fund a street and sewer infrastructure program.
The city council will vote on the second and final reading of the tax levy ordinance at its next meeting on Monday, Dec. 17. The overall total levy is $1.8 million, with $560,153 of that being the Princeton Public Library’s total levy. Skaggs said the library’s tax levy rate is 41 cents.