St. Charles tax-abatement strategy saves residents millions in property taxes
The City of St. Charles recently posted an editorial on its website that explains the long-term process that the local government has undergone to keep its portion of property taxes for residents at just 10 percent for the past six years.
“We’re pretty proud of the fact that responsible financial stewardship has kept the city’s operating tax levy at 10 percent of the entire property tax bill since 2009,” the article said. “On a $300,000 home, that means $928 pays for a full year of city services.” The services covered by that $928 include police and fire emergency services, street-maintenance and around-the-clock snowplowing, city planning, economic development and engineering, among other functions.
One strategy used by St. Charles is tax abatement, the article said. Under tax abatement, a portion of the tax levy is reduced. In the past, St. Charles has made the choice to abate tax levies to repay General Obligation Bonds, which are issued to pay for large capital projects. To that end, the city works to ensure it does not use property taxes to pay back bonds that are issued to pay for projects. Instead, St. Charles pays for capital investment projects -- such as the Route 64 improvements or the East Side Parking Deck -- from general revenue sources, such as taxes on merchandise sales, liquor or tourism.
Using that strategy, the city can boast the fact that dollars spent in St. Charles actually pour right back into the local community. The article said that last year alone, tax-abatement in St. Charles accounted for an $8 million reduction in the total property tax bill.