Woodstock Planning to Swap $923,937 in Real Estate Cuts for $2,337,000 in New Sales Taxes

When major changes are made in tax and spending proposals, a citizen does well to compare costs with benefits.

Woodstock’s City Council scheduled a 10% property tax cut for Tuesday night’s meeting.

Real estate taxpayers would pay $923,937 less in the spring of 2018 than the $9,183,026 expected to be collected after this year’s tax bills go out.

The first twelve months of the 100% city sales tax hike is estimated by city officials to be $2,337,000.

That’s over two and one-half times as much money.

So, a Woodstock citizen would save one property tax dollar for every $2.50 of new taxes.

Actually, since Woodstock is a regional shopping town, outsiders would end up paying some of the extra sales taxes levied.


Comments

Woodstock Planning to Swap $923,937 in Real Estate Cuts for $2,337,000 in New Sales Taxes — 23 Comments

  1. Cal your numbers are incorrect.

    The property tax reduction will reduce the levy by 900,000 while the city will bring in 2,000,000 via sales tax increase.

    A windfall for the city, but not business owners or shoppers.

  2. WOW!!! Should have slept longer!!!

    Is this ground hog day all over again?

    First we have a post about employees interviewing their future boss and now we have the sleight of hand where we remove $ 1 of tax burden and replace it with $ 2!!!

    But then of course, that is the way communism works: Two steps forward, one step back!

    If you are a renter, you should be doubly p.o.’d!!

    Your landlord gets a tax break but you get screwed with higher sales taxes!!!

    Bet your rent does not go down!!!

    I will be moving more of my shopping across the state line.

  3. Industrial, Commercial, and Residential properties, what would the property tax savings be per $100k evaluation?

  4. Unless I have a typo, the numbers are from the City Finance Person.

    Here is his email:

    Sales Tax:

    For FY17/18 the City has budgeted to receive $779,000 in additional Home Rule Sales Tax. This is for 4 months as we don’t expect the tax to take place until January 1, 2018. For a full year, the City would expect approximately $2,337,000. It is important to remember that both the property tax cut and Home Rule Sales Tax are not official until passed by the City Council. At this point, the Home Rule sales tax has not been determined when it will be voted on while the Property Tax Cut is on the agenda to be voted on at tonight’s meeting.

    Property Tax:

    Tax Year 2015 Tax Extension $9,183,026
    Estimated New Growth 2016 $ 56,340
    Total $9,239,366
    10% Tax Cut ($923,937)
    2017 Levy Amount $8,315,429

  5. No matter, as your property taxes WILL at some point in the future be
    raised once again.

    This is nothing more than a political head fake designed to deceive the
    gullible public …. for now.

    More home for sale signs going up with each passing week, and
    that should tell you all you need to know about the future of
    Woodstock, McHenry County and Illinois.

  6. The Northwest Herald

    Woodstock City Council Considers 1 Percent Home-Rule Sales Tax Increase

    March 7, 2017:

    by Brittany Keeperman

    “Woodstock City Council members are considering a proposed 1 percent home-rule sales tax increase.

    The increase could affect ‘nonessential goods,’ which would not include such things as food from grocery stores or prescription and nonprescription drugs.”

    http://www.nwherald.com/2017/03/06/woodstock-city-council-considers-1-percent-home-rule-sales-tax-increase/amitk94

  7. City of Woodstock

    City Council Meeting

    Tuesday, March 7, 2017 (start time 7PM)

    The Agenda Packet for the meeting is located on the City website and contains the following memo on City of Woodstock Finance Department letterhead.

    (Pdf page 92 of 191 in the agenda packet.)

    To: Roscoe Stelford, City Manager

    From: Paul N. Christensen, Assistant City Manager / Finance Director

    Date: March 1, 2017

    RE: Proposed 10% Property Tax Reduction and Abatement Ordinance

    “At the direction of Woodstock City Council, and serving as a role model to other taxing bodies, the City of Woodstock is proud to offer the citizens and businesses of Woodstock for the 2016 property tax cycle 10% property tax relief in the City’s levy being submitted to McHenry County.

    Staff has calculated that this reflects $923,937 in savings to our community’s property owners for this year, and a compounded $5,315,100 savings over the past 6 years, when factoring in the allowed PTELL increases Woodstock City Council has decided to forgo.

    The attached chart outlines the anticipated tax savings, comparing this year’s original proposed final levy and the final levy with the proposed 10% reduction.

    This tax relieve will be seen by taxpayers on property tax bills to be received in May, due in two installments in the months of June and September of 2017.”

    [The chart is included on pdf page 94 of the agenda packet.

    The chart follows the memo in the agenda packet.]

    ————-

    pdf page 93 0f 191 in the agenda packet:

    “As also seen in many McHenry County Home Rule Communities, the FY17/18 Budget reflects a proposed 1% municipal sales tax on ‘non-essential goods’ (excludes most food purchased in grocery stores, and prescription and non-prescription drugs).

    Titled vehicles (cars, boats, motorbikes) are also excluded from the Home Rule sales tax.

    The FY17/18 Budget, as proposed, anticipates the Home Rule sales tax would not be effective until January 1st, 2018, and initial discussions indicate this source may be dedicated to address infrastructure needs such as street maintenance and police pension funding demands.

    This funding source would then be contributed to and shared by all shoppers coming to this community, including the increasing numbers who visit Woodstock to enjoy our popular events and attractions.”

    ————-

    Page 160 of 191 in the pdf agenda packet:

    City of Woodstock

    Revenues, Expenditures and Transfers

    Budget vs. Actual – Narrative

    For the Nine Months of the Fiscal Year Ending April 30, 2017

    Overview

    Sales tax collections continued to greatly exceed the seasonally-adjusted amounts realized last fiscal year.

    Through the end of the third quarter, sales taxes have increased 19.8% on a seasonal basis.

    As was previously reported, this increase is a direct result of revenue that was received from the State of Illinois for past due amounts related to one of the City’s major retail outlets, reporting collections back to January 2015.

    This additional revenue was identified by the City’s Economic Development Department utilizing information recently made available to local governments from the IL Department of Revenue, which identifies sales taxes generated by individual local retailers.

    It should be noted that if the aforementioned retailer’s back payments are excluded, the City would still realize an estimated eight to nine percent increase over the prior fiscal period.”

    ———–

    Pdf page 168 of 191 in the agenda packet:

    City of Woodstock

    Revenues & Expendituers

    Budget Vs. Actual

    For the 3rd Quarter of Fiscal Year Ending April 30, 2017

    Sales Tax Revenue

    FY 2017 Budget – FY 2017 Actual – FY 2016 Actual

    $3,736,000 – $3,362,924 – $2,852,718

  8. From the blog article.

    “The first twelve months of the 100% city sales tax hike is estimated by city officials to be $2,337,000.”

    When was that information revealed?

    Was it verbally stated in the Tuesday March 7th City Council meeting by a city official?

    Who?

    Was a source document for the estimate also presented, or was it just presented verbally?

  9. Would like to know what other Home Rule Communities are following the same track tax hiking track as Woodstock.

    That being, cut property taxes, hike sales taxes, resulting in hiked taxpayer revenues to the city or village.

    What is the overall sales tax (state, local) that will be paid on each of the various categories of items subject to sales tax in Woodstock?

  10. Your comment, Cal, about out-of-towners paying part of the tax is telling.

    Politcians love taxing people who can’t vote.

    It’s called “taxation without representation”.

    What the cheerleaders don’t get is it isn’t their job to keep making government bigger.

    They’re supposed to be taxpayer watchdogs.

    A net increase in government revenue is not inherently a good thing.

  11. More justification for allowing us to control levies, spending, with our vote.

  12. Woodstock money grab.

    This doesn’t surprise me.

    They “have to” pay millions of dollars for a building they don’t have plans for.

  13. I received the information in an email from the Finance Director.

    It is published in these comments.

  14. Illinois Department of Revenue records indicate 31 governments in McHenry County charge sales tax, including the County itself.

    There are several categories of sales taxes.

    If one goes to a store and buys a pair of shoes, that’s categorized as General Merchandise.

    Purchases in most municipalities and McHenry County are taxed 7% sales tax for general merchandise.

    That list includes:

    Barrington Hills, Bull Valley, Cary, Fox Lake, Fox River Grove, Greenwood, Harvard, Hebron, Holiday Hills, Huntley, Island Lake, Lakemoor, Marengo, McCullom Lake, McHenry County, Oakwood Hills, Port Barrington, Prairie Grove, Richmond, Ringwood, Spring Grove, Trout Valley, Union, Wonder Lake, & Woodstock.

    +++++++++

    A break-down of the 7% follows:

    5% – State

    1% – Local

    .25% – County

    .75% – RTA

    +++++++++

    Exceptions are:

    Lake in the Hills & Lakewood – 8%.

    Algonquin & Crystal Lake – 7.75%.

    Johnsburg & McHenry – 7.5%.

    +++++++++++

    So Woodstock will join Lake in the Hills & Lakewood at 8% on January 1, 2018.

    +++++++

    Food & Drugs are taxed at 1.75% in every municipality and the County in McHenry County.

    Purchases made on the internet and shipped to McHenry County are charged 6.25% for general merchandise and 1% for food and drugs; not sure what rate applies if the internet seller has a retail presence in McHenry County.

    Purchases of automobiles are taxed at 7% unless the buyer lives in Chicago in which case Chicago tacks on an extra 1.25%.

    +++++++++

    The following website is one of a few Illinois Department of Revenue sources of the above information.

    https://mytax.illinois.gov

    In the middle of the page under “Other Helpful Links” select “Tax Rate Finder.”

    ++++++++++

    The highest sales tax rates are generally found in some municipalities in Cook County.

    For instance, both the Cook County portion of East Dundee, and River Grove, have a 11% sales tax rate.

    The Harlem Avenue / North Avenue Business District portion of Elmwood Park has a 11% sales tax rate.

    All of both River Grove & Elmwood Park is in Cook County.

    +++++++++

    There is no maximum rate limit for sales tax for a home rule community.

  15. VotersInAction.com group went door to door and warned us about this.

    I was against Home Rule and the consequences of giving city council more control and diminishing control of the citizen.

    Didn’t take long at all for the Mayor and city council to exercise their ‘control’ against the taxpayer, against business and against tourism.

  16. Are these people who are on these councils / boards just brain dead!

    Do they not understand what Legal IL tax paying Citizens Want ?! and have been pounding on them to get!?

    IF YOU RAISE THE SALES TAX RATE THE SMART ONES WILL JUST SAVE IN DRIVING OVER THE BORDER AND I MEAN INTO WISC.

    OUR NEIGHBORING STATE AND BUY GROCERIS ETC THERE!

    BYPASSING YOUR / THIER TOWNS ALL TOGETHER!

    omg WAKE UP!

    Use your heads, and think ! be more creative Stop Spending its simple we can’t spend YOU can’t spend, until the economy actually Grows! Just run more people out of ILL…

    keep up the good work …

    pickpocketing has to end sometime but by then you will be left with all non working types, Good Luck!

    then trying to get a nickel out of them your going to have to garnish their Gov. Checks!

  17. The $2,337,000 is estimated yes however you did not put in what they currently get which is around $1,600,000. So ultimately they will be making an extra $700,000 to offset the property tax.

  18. The “extra $700,000” in sales tax is actually an extra $779,000 and that’s only for 4 months.

    But has the City voted on the sales tax hike?

    ++++++++

    Cal Skinner on 03/08/2017 at 8:52 am said:

    “Unless I have a typo, the numbers are from the City Finance Peson.

    Here is his email:

    Sales Tax:

    For FY17/18 the City has budgeted to receive $779,000 in additional Home Rule Sales Tax.

    This is for 4 months as we don’t expect the tax to take place until January 1, 2018.

    For a full year, the City would expect approximately $2,337,000 [in sales tax].

    It is important to remember that both the property tax cut and Home Rule Sales Tax are not official until passed by the City Council.

    At this point, the Home Rule sales tax has not been determined when it will be voted on while the Property Tax Cut is on the agenda to be voted on at tonight’s meeting.\

    Property Tax:

    Tax Year 2015 Tax Extension $9,183,026

    Estimated New Growth 2016: $56,340

    Total: $9,239,366

    10% Tax Cut ($923,937)

    2017 Levy Amount $8,315,429

    +++++++++++++++++++

    A big financial challenge for the City of Woodstock is the underfunded police pension fund.

    The underfunded amount represents the amount that should be in the pension fund, but is not in the pension fund, as of a specified date.

    The unfunded amount is the amount the employer, and thus taxpayer, owes to the pension fund.

    The pension fund is earning zero investment returns on the unfunded portion.

    When the unfunded pension amount is large, that’s a big problem.

    In a mature pension fund, the primary source of revenue annually should be investment earnings, not the employer contribution or employee contribution.

    In Illinois defined benefit pensions, the employer (and thus taxpayer) is responsible for 100% of the unfunded amount.

    The employee is responsible for zero of the unfunded amount.

    +++++++++

    The unfunded liability of the Woodstock Police Pension Fund increased from $5,138,733 as of April 30, 2005 to $9,621,710 as of April 30, 2014.

    The percent funded remained the same in that time frame, but the amount unfunded increased by $4,482,977.

    So whenever one sees or hears the percent funded, also find out the amount unfunded.

    Source: Illinois Department of Insurance, Public Pension Division, 2015 Biennial Report (covering the period 2013 – 2014), published October 1, 2015 (so the next release should be out around October 1, 2017).

    ++++++

    Woodstock also participates in the IMRF pension fund for municipal employees.

    ++++++

    The Woodstock Fire Rescue District is a separate property taxing district, not part of the City of Woodstock taxing district.

  19. A hike in the Woodstock Sales Tax from 1% to 2% is estimated by the city to result in $779,000 additional revenue over 4 months.

    There are 12 months in a year.

    $779,000 over 4 months x 3 = $2,337,000 over 12 months.

    The $2,337,000 is not the amount of sales tax Woodstock currently receives in a year.

    The $2,337,000 is the estimated amount of sales tax Woodstock would receive in a year if it hiked its sales tax from 1% to 2% (which is a 100% percentage increase).

    Woodstock can do so without holding a referendum because it is has home rule powers due to the fact it now has 25,000 residents.

    Municipalities with over 25,0000 residents automatically receive home rule powers.

    Municipalities with less than 25,000 residents can hold a referendum to add home rule power.

  20. typo.

    The $2,337,000 is the estimate amount of ADDITIONAL sales tax Woodstock estimates it would receive in a year if it hiked its sales tax from 1% to 2% (which is a 100% percentage increase).

  21. Chambana Sun

    Woodstock City Council Holds Workshop on 2017 – 2018 Budget

    by Wadi Reformado

    February 8, 2017

    “He [Assistant City Manager/Finance Director Paul Christensen] provided an estimate of the revenue that could be collected by the City with the imposition of various Home Rule Tax Rates of 0.25% to 1.0% with the corresponding additional revenue of $630,000 to $2.5 million.”

    http://www.chambanasun.com/stories/511080342-woodstock-city-council-holds-workshop-on-2017-18-budget

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