LAKEWOOD – Village officials fulfilled a campaign promise to bring property tax relief to Lakewood residents.
On Monday, the Village Board unanimously approved a reduction of 5 percent in the village’s property tax levy request compared with the previous year, as well as an abatement of 5 percent of village taxes.
The village has requested a levy of $1,586,509, a drop from $1,762,788 the previous year.
Village President Paul Serwatka wanted to pass a straight
10 percent levy reduction with no abatement, but several board members spoke up at a meeting Dec. 12 saying they did not have enough time to assess the implications of such a drastic cut.
At that meeting, trustees cautioned that dropping the tax levy so much in one year could hinder the village’s ability to pay for anticipated stormwater system upgrades.
They also said they were hesitant to cut so much right away under a new village leadership structure, and they wanted to be sure the quality of life that many moved to Lakewood for could be maintained.
The board agreed to reconvene Monday, at which point Chief Administrative Officer Jeannine Smith presented an alternative to the initial proposal in the form of a 5 percent levy request cut and a 5 percent abatement on the levy.
“There are understandable concerns with our new administrative structure,” Serwatka said Wednesday. “It’s very new. We have a new chief administrative officer, a new board president [and] a lot of new trustees.”
Serwatka was quick to point out that an audit of the village’s 2017 general fund showed a fiscal year fund balance increase of $213,516 over expenditures and a total fund balance reserve of $1,378,455, which represents 52 percent of annual expenditures.
The village’s auditor typically recommends a fund balance between 30 percent and 50 percent, meaning residents had been overtaxed under the previous administration, Serwatka said.
Consolidating the village administration, reducing the police chief salary and other cost-cutting measures have saved the village $177,879 and allowed it to cut the levy, Serwatka said.
“If we can do it, everybody can do it,” Serwatka said.
In accordance with the Property Tax Extension Limitation Law, taxing bodies that are not home rule, such as Lakewood, are limited in how much they can raise property taxes in a year.
A couple trustees were concerned Dec. 12 that if the village cut the levy by 10 percent, it could run into problems collecting revenue in the coming years because it only could raise taxes incrementally each year.
The village expects to upgrade stormwater and sewer infrastructure at some point, as the need became obvious during summer flooding.
But capital expenditure projects such as stormwater and sewer systems are not the intended purpose of revenue collected for the village’s general fund via property taxes, Serwatka said.