Pekin city officials made a mistake that, left uncorrected, would have increased the amount of property taxes collected beyond its legal limit without a public hearing.

The error will be addressed in a special City Council meeting Wednesday night, likely producing a lower property tax rate that would “slightly” reduce taxes for homeowners whose properties’ assessed value remains the same as this year, City Manager Tony Carson said Tuesday.

The new equation, however, will see the deficit in the next fiscal year budget for city pension payments double to about $1 million, Carson said.

That will be the result of “what I’ve intended for the past nine months,” no increase in property taxes collected next year, he said.

The stark increase in the pension deficit that will come from meeting that goal, however, highlights Pekin’s version of the burden of public workers’ pensions that communities must bear under state law.

Without a levy increase to cover those costs or significant reductions in city services, the burden will remain.

For now, “We’re not seeking additional property taxes,” Carson said. The city will use its general fund to cover the pension deficit.

Carson and Mayor John McCabe said city staff caught an error in calculations for the 2018 levy the council passed on Dec. 4 after it was submitted to the Tazewell County Clerk’s Office, which then determines the city’s property tax rate based on the taxes the city intends to raise. The city’s goal was to keep the tax rate at its current $1.22 per $100 of assessed valuation.

The approved levy took into account an estimated $6.2 million rise this year in the value of property in the city for taxing purposes. At the current property tax rate, it would collect slightly above $7 million in taxes next year.

That would exceed the 4.9-percent increase limit imposed by the state’s Truth in Taxation law, McCabe said. Such an increase would’ve required a public hearing, with no time left in the year for it. Cities must approve their levies by the last Tuesday of the year.

The council is expected to avoid the need for the hearing by approving a new levy of $6.48 million that will take into account taxes from new properties, Carson said.
That likely will lower the city’s property tax rate, he said.

“I don’t want the public to think they’ll see a significant drop” in their overall tax bill, about 12 percent of which is comprised of city taxes, he said.

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