If payments do come, they won’t be until 2012

By Ted Schnell • BocaJump

The annual property tax rebate for Elgin’s senior citizens is safe for now, although there’s still no guarantee there will be a rebate, and even if there is, it likely won’t come until after the first of the year.

There was no vote, simply a nod of heads in agreement after Mayor David Kaptain, in reaction to concerns voiced by Councilman John Prigge, said there would be no vote on the issue at this time; instead, the mayor said, it would wait until after the first of the year when full budget figures relevant to the program were available.

This is the second time the matter has come before the council in as many weeks and may serve as an indicator of the council’s reluctance to make tough budget decisions without detailed information.

The city faces overcoming a $4.5 million deficit even after several years of layoffs and millions of dollars in cuts. The senior property tax rebates have been popular among the city’s older homeowners and mobile-home owners, who have received annual property tax rebates of $200 and $35, respectively, since the first rebates went out in 1997.

But the program is not cheap. Since 1997, the city has rebated nearly $9.37 million to qualifying seniors. This year, the full cost of the rebates is estimated at $825,000.

What is different this year is that for the first time, the revenue stream for the rebates may not meet the threshold at which the council mandated the rebates would stop when the program was enacted in late 1996.

The funding stream for the rebates the admission fees and gaming tax receipts from the Grand Victoria Casino, which was 2 years old and generating $19 million a year for the city when the City Council first established the senior citizen property tax rebates. Even thought it seemed at the time that the city was bringing in more revenue from the riverboat than it knew what to do with, the council included in the rebates ordinance a kill switch: The program would end if annual riverboat revenues dropped below $13.275 million.

Chief Financial Officer Colleen Lavery estimates the city’s revenue from that stream will be just $13 million — well below that threshold — and points out the city already is running $188,000 behind last year’s levels in the fund. Adding to the drought in the riverboat fund is that for the first time, the Grand Victoria Casino faces significant competition from a casino that’s close to Elgin — one opened last month in Des Plaines.

In  light of the declining revenues, the city staff had recommended the council restructure the rebate program into two phases: The first phase would be tied the rebate to income, which would have limited the overall costs to just $325,000. The second phase would kick in only if the revenues ended the year surpassing the $13.275 million. Then, the city would issue a second round of rebates to those who had been cut by the income limits.

But two weeks ago, some on the council hoped they could reduce the cost of the rebates even while expanding the program to include a broader array of seniors. Initial research by city staff indicated the idea did not add up, and the staff on Wednesday returned with the original two-phased approach recommended two weeks ago.

So when the proposal was re-introduced Wednesday, Prigge suggested the council wait until it knows for certain whether or not the revenue stream hits the minimum $13.275 million threshold to allow the rebates to continue.

Lavery said the city should have that information by Jan. 10 — although she said her own estimates of where the city stands will be much better by November.