By Ted Schnell • BocaJump
Two weeks ago, the Elgin City Council directed the city staff to find out if it could cut the costs of the annual senior property tax rebate but with an eye toward expanding it to include only the city’s neediest elderly whether they owned homes or rented.
When the numbers were crunched, however, it did not look good — what council members proposed July 27 could cost more than twice as much as the city staff’s proposal to cut the program, whose revenue stream is nearing a critical threshold.
So on Wednesday, the staff will present the same recommendation it made July 27: To reduce the program’s costs by tying the rebate to household income levels and to the program’s funding source: admission fees and gaming tax receipts from the Grand Victoria Casino.
The City Council voted in late 1996 to establish the senior citizen property tax rebates, which were distributed the next year to seniors owning their own homes or mobile homes. The then-2-year-old Grand Victoria Casino was generating $19 million a year for the city. Even so, the council included in the rebates ordinance a kill switch to end the program should those revenues drop below $13.275 million.
That may happen for the first time this year, which is why the city staff presented its proposal to the council on July 27.
The staff proposal would curb but not eliminate the program this year because there remains uncertainty about whether casino revenues actually will drop below the $13.275 million threshold.
The staff’s proposal essentially would tie the rebates to household income via the Senior Citizens Assessment Freeze Homestead Exemption, whose participants must be 65 or older and have an income of no more than $55,000. The rebates would cost the city just $325,000.
The city had budgeted $825,000 for the program, but then the revenues for it started to drop.
The second part of the staff’s proposal would kick in if the riverboat revenues actually end up exceeding $13.275 million. The city will not know that until final revenue totals arrive in mid-January, Lavery said. If that threshold is met, everyone else who originally qualified for but had been denied the rebates would receive them, albeit much later than usual.
Elgin residents living in Kane County usually receive the rebate in July, while the city’s Cook County residents typically do not receive theirs until the fall.
Council wanted other options
But on July 27, members of the council wanted to consider other options — and directed staff to explore linking the rebates to poverty-level incomes, yet expanding them to include those senior residents who rent instead of own their homes. Suggestions were made that the city link the rebates to the Illinois Cares Rx Plus program or the state’s Circuit Breaker program. Both offer assistance to seniors based on income, and some on the council believed that tying into the state’s database would provide the city a ready list of eligible Elgin seniors for purposes of calculating the costs of expanding the program.
But there were troubles with that, Elgin Chief Financial Officer Colleen Lavery said Monday.
Lavery said she emailed the state on July 28 asking the state for data only for Elgin residents in the Illinois Cares Rx Plus or the state’s Circuit Breaker programs. The Illinois Department of Aging is considering her request, she said, but gave no indication how long that might take.
Assistant City Manager Rick Kozal added that the information may be exempt from disclosure under the state’s Freedom of Information Act, meaning the agency could refuse to share it with the city.
But Lavery noted there are other issues, as well. While the Illinois Cares Rx Plus program does set an income limit for individuals and couples, it has no requirement that participants own or rent their homes. That is problematic, Lavery said, since the council specified that the rebate be considered only for homeowners and renters. Any Rx Plus data, she said, would include individuals who do not own or rent a home but live with someone, such as a caregiver or family member.
Data from the Circuit Breaker program data might be more useful, Lavery continued, noting that the program’s income limits actually are closely akin to those in the Senior Citizens Assessment Freeze Homestead Exemption that was suggested as a yardstick for eligibility in the staff’s original proposal. Also under that program, she added, eligible participants must either own a home or live in a home that generates property taxes, which would included both homeowners and renters.
But without data immediately available from either state program, Lavery had to look elsewhere. She pulled in 2010 census data that showed 6,795 Elgin households with individuals age 65 or older. From there, she was able to pull together estimates indicating the cost of the rebates would be about $679,000, compared to the $325,000 cost associated with the staff’s original plan.
Plus, Lavery said, if the city’s riverboat revenue ended up meeting the threshold under this scenario, it would add another $500,000 to the overall cost of the program this year — $1.179 million compared to the $825,000 the city had budgeted.
