Understanding The Real Estate Tax Issue

Lately it seems that I am spend a good amount of my time educating the residents about the finer points of municipal government so they can understand the misleading and false promise that they have made by my opponents.  Unfortunately, I am also educating them at the same time on subjects they should already be fluent with if they are going to run the Village. 

The most common complaint that I hear from residents is that the real estate taxes are too high.  I believe I can identify with that since I pay about $14,000.00 in taxes each year.  High taxes affect me just like everyone else.  However, the Village of Crete is only responsible for about 12.6% or one eighth of the total real estate tax bill, about $2.4 million dollars per year.  While this may seem like a lot of money, it only represents about 23% of all the dollars the Village uses to operate in a year.  It is the only predictable source of income the Village has.  In the coming year, your tax dollars will be collected in the following amounts for the purpose shown:

  • General Operations                    $540,000.00
  • Street Lighting                            $  46,000.00
  • Police Protection                        $300,000.00
  • Police Pension  Fund                 $230,000.00
  • Public Benefit Fund                    $  18,000.00
  • Ill Muni Retirement Fund        $120,000.00
  • Social Security                           $150,000.00
  • Bond & Int. Debt Service          $  94,250.00
  • Fire Protection                           $650,000.00
  • EMA                                             $  61,000.00
  • Auditing & Accounting               $  36,000.00
  • Liability Insurance                     $225,000.00
  • Crossing Guards                         $  28,000.00

All spending not covered by the real estate tax collections shown above are covered by revenue generated from other sources.  The amounts shown above, for the most part, are equal to or less than what the yearly expenditure will be in the fund.  As an example, we spend just over $28,000.00 to pay the crossing guards that assist children cross streets on their way to and from school.  Our Liability Insurance bill is right around $225,000.00 per year.  On the other hand Police Protection costs about $1.9 million per year, with the additional dollars coming from a variety of other sources to make up the difference.  If you are going to cut real estate taxes, which of the above items can actually be cut, and if you do cut the tax collections by lowering the rate, where will new revenue come from to replace the loss?  Keep in mind that currently every penny of tax rate is equal to roughly $18,000.00 in tax dollars to the Village.  That same penny in tax rate, viewed as a reduction in the tax rate, on a house valued at $150,000.00 will produce a $5.00 reduction in the tax bill.  Put another way, you have to drop the levy request (as shown above) by $18,000.00 to see just a $5.00 reduction in the tax bill of a $150,000.00 home.

Note: This illustration applies only to the Village portion of your real estate tax bill.  Similar calculations could be performed for all taxing bodies listed on the tax bill to illustrate what affect a penny reduction would have for each.

As one can see, cutting taxes is a difficult task, because it takes a certain amount of money to cover all the village funding needs, and the costs of operation are always increasing.  Funding municipal government is a complicated and difficult task that requires skill, planning and knowledge of where money comes from and flows to.  My superior knowledge of this subject allowed me to skillfully guide the Village through the last very financially difficult years.  My management has produced a good bond and financial rating, a small reserve fund and a very conservative approach to spending.  No other candidate for Village President has anything close to this experience and record of successful operation.  There is no room for error in finance.  It’s so easy to spend money when you don’t have to be responsible for where it comes from.

IT’S NOT SPRING, ITS’ SILLY SEASON

In his latest letter to the editor Don Seehausen proposes to eliminate the “unnecessary vehicle sticker” road tax.  As so often in the past, Mr.Seehausen is promising something he knows little about.  He is again making misleading comments aimed at fooling the voter into thinking the present administration is doing something wrong, and he will singlehandedly make it right.  The following is the reality of vehicle stickers.  The devil is in the details, as they say.

While eliminating the vehicle sticker sounds like a great campaign pitch and something every vehicle owner would love, including me.  However, he does not explain how he expects to fill the $260,000.00 hole that action would leave in the Road and Bridge fund.  The sale of vehicle stickers accounts for about 45% of the total revenue for the Road and Bridge fund.  The remainder of the roughly $570,000.00 in total yearly revenue comes from the Road and Bridge real estate tax levy that is made by Crete Township.  This money is used to pave, patch and fix roads, curb repair and replacement, handle drainage issues, trim trees and bushes along road sides, road side mowing, salt, crack sealing, snow plowing, all storm sewer maintenance, street lighting maintenance, vehicle purchases, equipment purchases, vehicle maintenance, leaf pick-up and branch chipping.  Knowing that all of these functions are a necessity of operating and maintaining the Village and assisting the residents, it is easy to see that eliminating the vehicle stickers would be an irresponsible action without a way to replace the revenue.  While the majority of our roads are in “ok” condition, none are what I would call great, and that is because, if anything the Road and Bridge fund is underfunded.  We have a need for more revenue not less, to properly service the 50+ miles of roads in the Village of Crete.  So the $64,000.00 question still remains unanswered; how will Mr. Seehausen fund the elimination of the vehicle sticker?  Does he intend to raise our taxes to pay for his promise?  It has to come from somewhere. 

I believe we do a tremendous job of stretching every dollar of the limited funds we have.  Mr. Seehausen’s proposal is a perfect example of what many call “silly season”, where challengers say anything they can to get elected.  They throw anything at the wall and hope something sticks and hope they fool the voter into believing that the current administration is doing something wrong.  I can assure you that nothing could be further from the truth, and I believe the voters are smarter than Mr. Seehausen thinks.

Water – Your Part in the Pursuit of Quality

I recently posted an article on my blog site that addressed the issue of water quality as it relates to the water that comes from Village wells.  In that article I addressed acquiring lake water and treating the well water we currently have in our system.  In this article, I want to address what the Village currently does to help deliver better quality water to the residents and what the residents themselves can do to help improve their own quality. 

The Village water has naturally occurring iron particles mixed in with the water that comes from our wells and Crete water is naturally slightly acidic in nature.  These iron particles are microscopic in nature and are not harmful to drink.  These particles move along with the water as it is pumped through the system.  If the flow decreases, the particles tend to settle out because they are, after all, iron and iron is heavy.  Consequently, in areas of low flow, which there are many, these particles will settle in the bottom of the water main pipes.  Then, if flow increases dramatically or vibrations reach the pipes, the particles are stirred up and appear as rusty water in your house.  To combat the settling rust or iron particles in the water mains, the Village water department flushes the water system twice a year, spring and fall, by opening every fire hydrant in the town.  By opening the hydrant, we can speed up the flow of water in the mains, stir up the rust particles and flush them from the system.  If we get complaints in certain areas between flushing’s or we determine that other areas need special attention, such as dead end water mains, we flush those areas more frequently to help improve quality.  This is what the Village does to improve overall system water quality.  Now, let’s discuss what the homeowner can do to improve their water quality.

Much like the Village water system, each home or business is like a mini water system all by itself.  The same issues exist in a home as in the larger village system.  If you have low flow areas that don’t get used very often, iron can settle in those pipes also, causing you to have rusty water.  If you only wash clothes once a week, there is a bathroom that never gets used, or the outside valves where you hook up your hose for watering (called a sill cock) never get opened, you will most likely see some rusty water when you finally turn them on.  Keep in mind that flow is what moves the iron particle through your pipes.  So, if you have aerators on your faucets or other things that are meant to reduce flow and save water, you are not going to produce enough flow to move particles that are accumulating in the horizontal piping in your home.  In short, you need to flush your system periodically, just like the village flushes their system.  This is all a part of home ownership when you are on well water.

Here are some common sense suggestions that are easy to do: 

Once a month or so, open the sill cocks around your house all the way and let the water run until no discoloration is noted.  Do this by starting at the faucet closest to the street and flush to the back.  Flush any other raw un-softened water faucets next.  If you have a water softener, which helps remove iron particles, and it is working properly, your system should now be clean.  If you are not using a water softener or it is not working properly, then you should continue to flush the system by opening up all faucets, one at a time, full blast and run them until the water is clear.  This needs to be done at all faucets in the house.  If you have a water softener, make sure it is operating properly and you are keeping salt in the brine tank.  If you fail to supply the softener with salt, it will actually make the quality of your water worse.  If you choose not to use the softener, do not just unplug it.  First operate the bypass valve to stop running raw water through the softener and then unplug it.  All your water will be hard until you begin using the softener again.

Softening the water is a cheap and easy way to improve your overall water quality in the home.  Crete has about 35 grains of hardness for raw water, and if you are purchasing a softener, the person selling it to you would need to know that.  A demand style softener is considered the best, because it only regenerates after a specific amount of water has been run through it.  Older style softeners regenerated on specific days whether it is need or not, regardless of water usage.  It is suggested that you soften the water you use for bathing, washing clothes, and flushing your toilets, while you use hard/raw water to water your lawn or plants and to cook and drink.  If you feel the necessity to filter your water, and you are using a water softener, then the only water that would typically need to be filtered would be for drinking and cooking.

There are several other ways to improve your personal water quality and some can become very expensive to install and maintain.  In the end, it kind of comes down to personal preference and what you are willing to spend.  My personal experience is that softening is the cheapest and easiest way to go, but you still have to do your part to maintain the proper function of the system, including flushing, just like we do with the Village system.

There is one final issue that can have an adverse affect on your water quality and that is the piping in your home or business.  If you do not have copper or plastic water supply pipes, you are most likely going to have difficulties with water quality, no matter what you do.  Steel or iron pipes just don’t work well with hard water, and can be a very significant negative factor in water problems, especially as it relates to rust.  Changing them to copper or plastic will be a great improvement, and softening will help.

It is my sincere hope that this article, and the previous one, have helped to provide significant insight into the question of water quality in Crete.  As always, if you need further information, want to discuss this topic or need assistance from village staff, please feel free to contact me though the village office, 672-5431 or meinhorn@villageofcrete.org via my cell 708-473-2670.  I am here to help.