Building a new home in Peoria’s North Valley now comes with a 10-year property tax abatement.
The Peoria City Council approved an incentive program on Tuesday that applies to newly constructed, owner-occupied single-family and duplex homes in an area known as the North Valley Redevelopment District.
The motion passed 8-to-3 with "no" votes from council members Rita Ali, Beth Jensen and Denise Moore. Moore said the Peoria Public School Board indicated it was still awaiting information from at-large council member John Kelly regarding the impact of the program on the district’s tax revenue.
“We don't know how much it's going to cost, we don't know whether it will be successful or not, we don’t know how it's going to impact the schools,” said Moore. “If this is so successful in other parts of the country, we should have easily been able to provide documentation to that effect.”
Kelly said the school district and other taxing bodies will continue to receive revenue from assessed land values, adding the program aims to attract more families, and taxpayers, to the area.
“It tends to bring in new money, new population, more stability in neighborhoods, less crime, et cetera,” said Kelly.
The abatement for qualifying homes lasts 10 years with 100% abatement over the first six and phasing out each year after.
The ordinance also requires the creation of a rebate fund to collect any new revenue generated by an increase in assessed land value in the redevelopment district. Portions of that fund can be utilized by abatement program participants toward their Illinois state income tax payments.
Earlier maps of the proposed redevelopment district had overlapped with the existing East Village TIF district. Those properties remain in the TIF and were removed from the final tax abatement program area approved by council.
Waiting on Treasury on rules, release of stimulus funding
According to City Manager Patrick Urich, Peoria should receive around $46 million from the federal government as a result of the $1.9 trillion stimulus bill signed earlier this month by President Biden.
Based on population, Peoria will receive those funds as a direct allotment from the federal government -- unlike CARES Act funds that went first to the State of Illinois before reaching local governments and businesses.
The treasury department has yet to issue formal guidance, but it is expected that money can be used to cover the city’s expenses and economic hardship brought on by the COVID-19 pandemic -- but not for pension funding or to offset tax cuts.
The city should receive half of the funding within 60 days and the remainder by the end of the year. Urich recommended a council policy session to create a strategy for spending the money.
“We have to remember this is one-time revenue. Once it’s gone, it’s gone...we still have our own fiscal challenges that we'll have to deal with long term,” said Urich.
One sign of the tight pandemic-era budget may come in the form of a shaggier look to the city’s greenspaces this summer. Council approved this year’s tree trimming and stump removal contract with JIMAX for around $100,000 lower than previous years. The vacant lot mowing program also saw a reduction in spending.
But Urich said those expenditures should return with time, and noted that the stimulus funds will allow the city to avoid borrowing $10 million to balance this year’s budget.
Video gaming fee change reduces cost for establishments
Peoria establishments wanting to maintain their video gaming licenses for the next year should pay a fee of only $125 per gaming terminal compared to $500 last year.
That comes after the city council effectively cut the annual license fee in half for local establishments with a new ordinance requiring the fee now be split 50-50 with the terminal operators that supply the gaming machines.
That permanent change comes after a temporary COVID relief measure passed by in January that reduced gaming terminal licenses by 50% for the 2021 license year and extended the renewal date to April 30.
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