Aurora Proposes 12% Property Tax Increase Amid Rising Debt

Residents of Aurora may face a significant increase in their city property tax rates next year, following a recommendation from the Aurora City Council’s Finance Committee. The proposed property tax levy stands at approximately $103.7 million, reflecting an increase of $11.1 million or 12% over the previous year. This is expected to be the first rise in property tax rates since at least 2017.

The Finance Committee unanimously endorsed the levy, which is set to be voted on by the full City Council on December 16, 2023. Aurora’s Chief Financial Officer, Stacey Peterson, indicated that the increase is primarily due to debt incurred by the city this year, alongside rising costs associated with police and firefighter pensions.

The tax levy represents the total amount the city aims to collect in property taxes, but the actual tax rate that homeowners pay is determined by the county government. Peterson noted that, for a home assessed at $300,000, residents might see an additional $211 in city property taxes next year, based on an estimated tax rate of $1.63 per $100 of assessed value.

While the property tax rate for the current year was anticipated to decrease due to an increase in the assessed value of properties, the upcoming year presents a different scenario. The increase in the proposed levy does not solely cover operational costs; it also addresses escalating debt payments and mandatory funding levels for pensions. Peterson highlighted that the portion of the levy allocated for police pensions could rise by around $2.4 million, reaching nearly $23 million, while the firefighter pension allocation may increase by $1.8 million to approximately $16.4 million.

The city’s debt service levy, which encompasses repayments on borrowed funds, is projected to experience the most considerable jump, increasing by nearly $6.9 million to a total of $12.7 million. Mayor John Laesch has previously pointed out that efforts to revitalize the downtown area have led to substantial debt, which now totals $327 million. He stated that the city would need to allocate about $27 million annually for both principal and interest payments moving forward.

Earlier this year, the Aurora City Council authorized over $100 million in additional debt through bond sales to fund various construction projects, including new fire stations and renovations at RiverEdge Park. Although some of this debt was incurred during Laesch’s administration, all projects funded by the bonds received approval under former Mayor Richard Irvin.

To mitigate the burden on property owners, the city regularly employs funds from various sources to offset the debt service levy. Peterson proposed an abatement of approximately $14.9 million from the levy, aimed at reducing the property tax bills for residents. This funding would come from the city’s gaming tax, real estate transfer tax, hotel tax, and other revenue streams. The Finance Committee also recommended this abatement for approval.

Even with the proposed abatement, property owners would still be responsible for nearly $12.7 million in debt repayments. Peterson noted that in previous years, the city managed to abate all but around $4 million of its debt service levy, which increased to $5.8 million last year.

Interestingly, the allocation of property taxes for day-to-day city operations is set to decrease. Peterson stated that the city will not increase this figure to account for new construction, which helps keep the property tax rate lower than it could have been. In an effort to control expenses, the city plans to cut millions of dollars and approximately 135 positions from next year’s general operating budget. Currently, property taxes contribute to about 37% of the revenue for that fund.

As Aurora prepares for potential changes in property tax rates, residents and city officials alike will be closely monitoring the Council’s decision on the proposed levy and its implications for the community’s financial future.