DECATUR - As part of a plan to ensure the pensions of police, fire, and city employees are fully funded, city manager Ryan McCrady has proposed an increase in the property tax rate

The state of Illinois has shifted more of the burden of funding employee pensions on municipalities. The state defines how much of the pensions are vested by public employees and how much by their employers, McCrady said. Recently, the legislature decided to require employers to vest more of the money.

"The state has no vested financial interest or consequence of their decisions," McCrady said at Monday night's Decatur City Council meeting. "They set the rules that we are required to follow."

City staff's plan would raise the property tax rate to $1.32 per $100 of a property's equalized assessed value. The current rate is $1.23.

McCrady told council members he is aware a tax increase might not be a popular solution, but it is the best way to bring in more revenue for the pensions.

McCrady said since the property tax is already directed toward other obligations, such as education, rather than the city's general fund, it is the best place to draw in more money for pensions.

"Whether we raise utility tax, or motor fuel tax, or sales tax, or food and beverage tax, they're all taxes," McCrady said. "I thought this was the most appropriate place to fund this increase."

City councilman Dan Caulkins and councilwoman Betsy Stockard both brought up the possibility of a wheel tax instead.

"Our citizens might look at it as maybe they would have to pay it, but so would other people who use our city streets and emergency services and then go home somewhere else," Stockard said.

McCrady said a wheel tax might not be worth the cost of enforcing it, and might divert police attention from other matters.

Randy Prince, president of the Greater Decatur Chamber of Commerce, said an increase in property tax might make Decatur less attractive for prospective businesses.

"Higher taxes make us less desirable in the long term," Prince said. "I understand the city manager's approach to using property tax because he thinks it's the fairest way to do it, but I think they could also look around a little bit more and look for some other options as well.

"The city is under an obligation that's been created by the General Assembly on these pensions that I think a lot of people don't understand," Prince said.

The council must approve any increase in the property tax by the end of December.

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