URBANA - Urbana city leaders voted to raise property taxes Monday night. But most homeowners won't even notice the difference.
City leaders predicted Urbana's assessed property value to increase about 1% this fiscal year. Turns out it did the opposite, dropping nearly two percent. That change in direction resulted in a budget hole of about $200,000.
To offset that, council decided to raise the property tax rate by nearly 2%.For example, a homeowner with a property worth $150,000 paid $647 in taxes last fiscal year.If you take the decrease in assessed value, then add it with the tax rate increase, that homeowner will pay about the same amount, $647.
City leaders say if they didn't increase taxes they'd have to pull money from the capital improvement fund, money that's supposed to be spent on road projects and sewer repairs. Homeowners we talked with say it sounds like a fair trade.
"It's really not going to be that much difference and i understand that most people say hey, nickel here, dime there. But if they can maintain the money that they're using to make the repairs by doing that, I have no problem with that," said John Cooper of Urbana.
The increase only eats up a portion of that budget shortfall, bringing it down from $200,000 to about $60,000. But city leaders say that five-figure amount is a little easier to work around than $200,000.
Urbana's previous property tax rate: $1.2942 per $100 of assessed valuation.
New rate after 1.88% increase: $1.3190 per $100 of assessed valuation.