Elgin City Council approves first-reading budget and adopts higher property tax rate for 2025

The Elgin City Council on Sept. 2 held public hearings and approved first readings of the city—s proposed fiscal year 2025–26 budget and a property tax rate that city staff said will raise more revenue than last year. The council voted to advance the budget and ratified a proposed tax rate of 0.619296 per $100 of assessed value (the voter-approval rate), which city staff said represents an 8.64% increase from 2024.

City officials said the proposed budget reflects a fiscal "reset," projects a 7% sales-tax and 4% property-tax revenue growth, maintains funding for all 180 existing positions, and includes a planned 4% cost-of-living adjustment for city employees effective Jan. 1, 2026. Acting finance staff told the council the general fund is about 46% of the city—s total revenue and that public safety is the largest expenditure area at roughly 34% of general-fund appropriations.

The council was told the average homestead taxable value increased from about $265,000 in 2024 to about $272,924 for 2025. Staff calculated that the tax due on an average homestead would rise from about $15.15 in 2024 to about $16.90 in 2025, an increase the presentation characterized as roughly an 11.6% change in tax due. City staff also said a 1-cent change in the tax rate would raise approximately $116,996 for the city.

Staff said the budget uses some fund balance to support operations in the near term and recommended a mid-year fiscal assessment to consider funding additional capital projects. The council opened and closed three public hearings (on the five-year capital improvement plan, the budget, and the tax rate) before taking the first-reading votes.

On votes during the meeting, council members recorded affirmative votes during the two first-readings and the ratification motion. City staff said a lower tax rate would require cuts to programs and service levels. The council set a second reading and final vote for Sept. 16, when members may adopt the budget and a final tax rate; staff reminded the council that if it lowers the tax rate on Sept. 2 it may not then raise it on Sept. 16.

Why it matters: City staff said the proposed budget preserves services and personnel while using modest revenue growth projections; the proposed tax rate increase would directly raise property-tax revenue and increase the typical Elgin homeowner—s bill by roughly $135 for the 2025 tax year. The council—s final vote on Sept. 16 will determine the rate that goes into effect next fiscal year.

The council paused only briefly for executive-session business on personnel during the meeting and reconvened to complete the budget and tax-rate hearings before adjourning.