A divided Wellington Village Council gave preliminary approval Tuesday to hold its tax rate at 2.5 mills — the same as in the previous three years — despite an increase in revenue.
In a 3-2 vote, council members decided to keep the tax rate steady at the first of two required budget hearings.
Vice Mayor Howard Coates and Councilwoman Anne Gerwig dissented, arguing that the village should give taxpayers a break in light of increased revenue.
“Our families are losing per-capita income,” Gerwig said. “It may be a minuscule lowering, but it’s going in the right direction for what our families are going through.”
A rate of 2.5 mills means a property tax of $2.50 for every $1,000 of taxable value. At that rate, the owner of a home assessed at $150,000 after exemptions would pay $375 in village property taxes next year.
Wellington will finalize its budget at its next meeting, Wednesday, Sept. 26. The maximum tax rate they could adopt is 2.5 mills, but they could still lower the rate at that time.
For the first time in five years, Wellington will see an uptick in its property tax revenue, Director of Finance Mireya McIlveen told council members.
Next year’s proposed budget of $74.46 million also marks the first increase in five years, up $524,000 from last year. Initially the budget was expected to fall, but it grew due to increased transfer funds, she said.
Coates said that having an increased budget on a lower millage means residents will continue to get great service. “For the first time in years, we can decrease the millage rate,” he said. “If we can do that in a way that doesn’t impact the services we provide to the village, how do you not go with that? Our residents haven’t had a decreased tax rate in four years.”
He asked McIlveen what the difference in revenue between the rates would be for Wellington.
“The difference between 2.47 mills and 2.5 mills is approximately $150,000,” she said, adding that it translates into a savings of approximately $6 for residents.
Though Coates pushed for the council to lower the rate, Councilman John Greene said he was concerned that, in light of Tropical Storm Isaac, Wellington might need the extra money.
“I don’t want to handcuff us at this point, where we don’t have the option of going back and raising it,” he said. “I would rather be cautious at this time and let staff reevaluate based on the events of the last couple of weeks. I am concerned about doing anything that restricts us.”
Councilman Matt Willhite agreed. “If we set it at 2.47 and [staff] comes back with any new information in the next two weeks about the storm, we absolutely cannot raise the millage rate,” he said. “We’re stuck at 2.47 and that’s it.”
He noted that the village may need to make improvements to prevent future flooding. “We had residents flooded in houses who couldn’t get out,” Willhite said. “We have to do things to get them out of there, which is raising roadways, working on culverts and building bridges.”
Mayor Bob Margolis said that residents he talked to were largely in favor of holding the tax rate the same. “They said, ‘$6 a year is 50 cents a month; what are we arguing about?’” he said.
He, too, agreed that Wellington might need the money for improvements.
Coates made a motion to approve the budget with a tax rate of 2.47 mills. Gerwig seconded the motion, but it failed 3-2.
Coates offered a word of warning to the council. “If you give staff more money, they’ll always find a way to spend it,” he said. “I don’t think that should ever be a reason for increasing taxes to our community.”
But Greene said he wanted staff to have the opportunity to use the money to offset costs of the storm.
“I just don’t want to be in a position that we can’t go back and say we don’t think it’s a good allocation of those funds,” he said. “This still gives us the opportunity to go back and revisit lowering the rate.”
Willhite then made a motion to maintain the tax rate of 2.5 mills. The motion passed 3-2, with Coates and Gerwig opposed.