MORRIS – Property values continue to decline and legislation looms that could cut the amount of point of sale income the county gets, but Grundy County is “looking pretty good,” financially, said County Assessor Dave Henderson.
Henderson and Grundy County Board Chairman Ron Severson explained the good, bad and ugly of the county’s finances to municipal leaders during the Financial State of the County address Tuesday morning.
“We just thought, with everything going on, we should lay out a financial picture of the county,” Severson said.
Severson said there is still a high risk of losing $1.8 million annually in tax revenue generated from controversial sales tax strategies used in Channahon, but he applauded the county’s efforts to reach tax settlements with Dresden, Equistar and Midwest Generation.
“I think by this spring, we will have all three of these cleared up,” he said during his speech.
The county recently approved a settlement agreement with Midwest Generation which wipes away a $19 million liability and opens up the former Collins Station property for new development.
Currently, the 2,000 acre property only generates about $900 in tax revenue for the county, Henderson said.
Since the land is located within the first Economic Development Project Area and is equipped to house an industrial plant, the county hopes to redevelop the property and generate more substantial property tax revenue.
The EDPA is a tax zone that allows the county to negotiate taxes for eligible projects, creating a new investment in the zone.
A tax dispute with Equistar is next in line to be resolved. An agreement should be approved at next month’s county board meeting, Severson said.
“With that agreement, the county will receive a pilot payment of about $296,000,” Severson said.
Minooka taxing districts should also receive substantial payouts from the Equistar settlement.
An agreement locking the equalized assessed property value of Dresden Station for the next few years also is on the way.
Henderson said the county expects Dresden’s EAV will decline and are drafting a fair agreement to reflect the decrease in value. The plant’s assessed valuation in 2013 was $565 million.
“Each year in the life of the agreement –which will run through 2017 – there will be a $5 million drop per year,” Henderson said of the new agreement’s tax schedule. “With the bottom number being around $490 million.”
Countywide, residential property values will experience about a 1 percent or more decrease, Henderson said, which could hurt the county’s revenues this year.
Bond payments also are a concern because payments are scheduled to jump higher each year until they hit about $1.4 million in 2029, Severson said.
“We have got to be very careful because those are creeping up,” he said. “They will keep increasing every year.”
To account for future financial strain and budget reductions, the county is exploring ways to recoup revenue, including increasing sales tax.
Severson stressed a tax increase is something he wants to avoid, but the county wants to be prepared in the event the county loses Channahon’s point of sale tax revenue.
The topic was discussed briefly at the Grundy County Finance Committee on Monday night.
The tax increase would be a public safety tax, meaning it could only be spent on public safety related expenditures.
The added charge would raise the sales tax rate from 6.25 percent to 6.75 percent, Grundy County Auditor Tawnya Mack said during the finance meeting.
Mack said the increase could potentially generate millions in revenue for the county. The tax would have to be approved by referendum.
“I’m not really in favor of the public safety tax and I think it will be tough to sell,” Severson said during the address. “A lot people feel they are taxed too much, but we’re going to talk about it.”