As Washington pundits and politicians debate a federal "fiscal cliff" at the end of the year, Genevans may be facing a similar crisis without realizing it: the one-two punch of declining property values and increasing property tax demands by local government.
Anecdotal evidence and recent articles hint that at least some Genevans are being taxed out of their homes.
An excellent article in Sunday's Daily Herald points out some staggering numbers, and the headline is more than enough to capture your attention: "Local property tax levies up $3.5 billion since '05."
That number again: $3.5 billion.
Meanwhile, the average price of a Geneva home fell by 23.8 percent year over year for the month of October. Obviously, that's just one month, but the drop is significant and the statistic most likely is related to foreclosures. As evidence, all you need to do is look at a local newspaper to see pages filled with foreclosure notices.
Presently, the Yahoo! homes website shows 115 Geneva homes in foreclosure.
Couple that with the unsettling news that Geneva's tax base is shrinking. According to the city of Geneva website, the EAV for Geneva was $971 million in 2011. That's down from $1.037 billion in 2010—about a 6.3 percent drop.
Geneva's EAV high point, in 2008, was $1.146 billion. So in four years, the value of property in Geneva dropped by more than 15 percent.
Back in January, city officials were extremely concerned when they found out that the Equalized Assessed Value of property in Geneva's downtown—in Special Services Area No. 1 to be exact—dropped by a whopping 25.7 percent in just two years and the downtown as a whole was down 15 percent. The good news is that city officials have said in recent months that those numbers have started to rebound significantly.
School District 304, which has a larger footprint than the city of Geneva, has seen a similar drop in EAV, as shown on its website. The EAV went from $1.48 billion in 2008 to an estimated $1.3 billion in 2012.
What have state and local taxing bodies done in reaction to this sea change in property values? According to the Daily Herald and other sources, they've asked for more money.
This year, School District 304 passed a resolution seeking a 1.5 percent tax levy increase. The city of Geneva staff has recommended seeking the full 3 percent levy increase allowed under tax cap legislation.
Sunday's Daily Herald cover story didn't break down Geneva tax levies specificially. But it did indicate that Kane County taxing bodies levied $271 million more in 2010 than they did in 2005.
A year ago, Geneva Patch selected as the No. 2 story of the year, "Property Taxes Rise as Economy Flounders," and suggested that the issue would be "Geneva's greatest challenge of 2012."
There is every indication this local "fiscal cliff" will be the greatest challenge of 2013, as well.