Champaign council could finalize sales tax increase

CHAMPAIGN — City council members this week could finalize the sales tax increase they have already supported as a means to pay for police, fire and library services as they head into a new budget year.

They will vote on the one-quarter percentage point increase and are expected to approve a new budget when they meet at 7 p.m. Tuesday in the Champaign City Building, 102 N. Neil St.

The Champaign County Chamber of Commerce last week admonished the council for moving quickly on the sales tax increase, but council members said the decision was part of weeks-long debate.

If the city council affirms its 8-1 straw poll last week in favor of the increase, it would move Champaign's sales tax rate from 8.75 percent to 9 percent effective Jan. 1. The increase is expected to generate $2.8 million in new revenue, and $1.7 million of that would pay for six new police officers, for firefighter overtime necessary to keep an engine on the city's west side in full operation and to avoid a reduction in hours at the library.

City council members plan to discuss what to do with the remaining $1.1 million in the coming weeks.

Because of lag time in how the tax is collected and paid to the city, Champaign would not start seeing the revenue bump until May 2014. The city expects to collect less than $1 million in the coming fiscal year and city officials have suggested using cash reserves to cover the expenses in the meantime. They will need to use a portion of the tax revenue in future years to rebuild those reserves.

Raising the city-only sales tax from 1.25 percent to 1.5 percent would put Champaign's share of the tax roughly on par with most comparable central Illinois cities.

But the city's total sales tax — which includes all the sales taxes charged by the state, county and school districts — would be near the top of the list of comparable cities at 9 percent. Only Decatur (9 percent) and a special taxing district in Peoria (9.25 percent) would be as high or higher.

The sales tax vote is the first scheduled in a slate of budget-related ordinances the city council will see on Tuesday. The new budget year begins July 1.

Council member Deborah Frank Feinen was the only "no" vote during a straw poll last week on the sales tax increase. She said she wanted city officials to spend more time looking for budget cuts before tax increases.

Other council members said they have already put a lot of effort into cutting the budget — particularly during the recession years — and there is nothing left to cut.

The chamber of commerce has asked city council members for more time to allow feedback from the public. Chamber president Laura Weis said last week that repeated tax and fee increases are hurting businesses that are still struggling with the effects of the recession.

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Boss Hog wrote on June 03, 2013 at 7:06 am

This will only serve to drive more business out of town. People can drive a few miles to smaller towns and buy stuff where total taxes are 6.25%. Why should they shop here? And why would anyone want to start a new store here?

Commonsenseman wrote on June 03, 2013 at 8:06 am

this is insane, dont they realize their mismanagement will drive business out of town

Fedupwithstatereps wrote on June 03, 2013 at 8:06 am

This is crazy Champaign City Council!  It's cheaper in New York City than it is here!  I already don't buy my gas in this city, I won't be buying groceries, clothing, or anything else!

Haba wrote on June 03, 2013 at 8:06 am

During a time of economic struggle for many of Champaign residents, the board has consistantly raised fees and taxes. Residents are faced with increased costs of products and low increases of wages. Between the doubling of taxes by the state and the city of Champaign constant creating new fees and raising taxes, I as a long time Champaign resident am ashamed to live here. The city just like the state both only seem to know how to raise fees and taxes instead of making the tough budget cuts that need to be made. We need to vote them all out to send a message as residents that they have not only failed the state and city but more importantly the residents living here.

randyandjoy1 wrote on June 03, 2013 at 2:06 pm

Haba: I understand and you are right, of course. But they (the ill-informed voters) will simply elect others of similar ilk back. As long as politicians knows they can give trinkets to the dependent voters (whcih are easily over 50% in Illinois!-way over) to get in they will! The rest have no choice,...stay and die or leave!

Trapper wrote on June 03, 2013 at 9:06 am

I already pay 15 to 20 cents less for gas in Newman and Matton than I do at anytime in this mis managed city. I pay less sales tax on food and dry goods in Tuscola than I do in this mis managed city. Good thing we elected this new mayor he is doing a wonderful job working with the board to reduce cost, cut spending and control goverment costs. The standard answer in any goverment in Illinois just keep spending and tax everyone to DEATH! Excellent job!

Ron Cook wrote on June 03, 2013 at 9:06 am

What a killer of a tax.  Thankfully we moved out of IL and our sales tax is about 9.5%, BUT our Real Estate tax is FAR below Champaign's and our State Income tax is far below Illinois.  PLUS our state has a balanced budget.  

randyandjoy1 wrote on June 03, 2013 at 2:06 pm

Wise move Ron...our sales tax is 7% and we are lower across the board compared to C-U! I don't understand why any employer unless your are government of some type (education, etc). would still be there....masochistic?

parkmymeterelsewhere wrote on June 03, 2013 at 10:06 am

In the original article posted a couple weeks ago about the library it was designated as a most commented article.  The posting by proponents of the sales tax were nothing short of disgusting.  This scenario of excess taxing/sucking money out of our pockets has been going on a long time because there is no check/balance system to fight it.  Wasn't it the County court house or clock tower this was done and there was an excess amount of money from that scenario?   Put parking meters in the library lot!!

pattsi wrote on June 03, 2013 at 12:06 pm

Removed a duplicate message.

pattsi wrote on June 03, 2013 at 12:06 pm

Just to clarify, there is no extra money related to the courthouse addition, bell tower, and renovation of the original courthouse. The bonds for these projects will take years yet to pay off. Plus those projects are under the county, not the city of Champaign.

rsp wrote on June 03, 2013 at 12:06 pm

I think the clock tower was all donation, too. I seem to recall Steve Beckett and the others asking for donations for it.

parkmymeterelsewhere wrote on June 05, 2013 at 8:06 pm

There was a sales tax increase in the late 90's/early 2000 spear-headed by Steve?lawyer in which the outcome of the collected tax was a definite surplus--I just don't recall what it was for.

Janet wrote on June 03, 2013 at 11:06 am

We talked about this at my house, too, and will look for ways to spend our $$ elsewhere. I'm pretty sure we pay more for sales tax here than in Cook County.  It's insane.

bluegrass wrote on June 03, 2013 at 11:06 am

Here is the reality.  The number of people who are going to make a special trip, and drive somewhere farther away, to save .25% on their sales tax are not going to make a significant difference in this plan.  

That being said, I understand the council believes they have a need for revenue.  However, if you need $1.7 million, then levy a tax for that amount.  If it comes up short then figure out a way to cut somewhere else, but since when do we just raise taxes with no reason other than to figure out what to do with the extra money later?  That is ridiculous.  Why only raise an extra million?  Why not an extra $3 million, or $10 million?   

Janet wrote on June 03, 2013 at 12:06 pm

You're totally right, bluegrass (on both counts), and whether I or anyone in my family will actually make special trips remains to be seen. But I won't go out of my way to shop in Champaign, either.  The council has made a lot of boneheaded decisions over the last 8 years or so. No problem for them--they can just vote to have citizens correct them. The next time they need a bailout, we all know where they will go.

randyandjoy1 wrote on June 03, 2013 at 2:06 pm

don't give them any ideas!

yates wrote on June 03, 2013 at 11:06 am

This is what happens when elected officials are not kept in check. They will spend your tax dollars on what they like and raise taxes to cover their overspending. Vote smarter next time.

MSJ66 wrote on June 03, 2013 at 12:06 pm

Didn't these buffoons vote themselves a raise in the last year or so? A little research from an 8/5/2006 NG article shows councils members voted themselves a raise from $4000 to $5000 then. Also found an article from 9/10/2012 where they wanted to go from $5000 to $6000 a year for council members. I say lets put a bunch of monkeys in the council seats and see how good they do. I am sure they can't do any worse than these tax and fee adders and increasers we have on there now. I encourage everyone to keep track of who voted for the storm tax, the gas tax, the sales tax, the high cable tax, the high cell phone municipal tax and on and on and vote them out. Want more money for themselves so they can spend other peoples money. Where are all the road construction projects funded by the gas tax? Champaign has the worse roads of any communiuty of its size that I have been to. When are they going to bring up the foolish plastic bag tax/fee again. Champaign is a joke compared to what it was when i moved here 25 years ago and it can be traced to the pitiful degradation of the quality of the people on the city council over the last 10-12 years.

randyandjoy1 wrote on June 03, 2013 at 2:06 pm

MSJ66   I moved away exactly 25 yrs ago...it was quite obvious and not just in the past 10-12 years. But, it's always easy, (local, County, State or Federal to blame the politician) but the real culprit is the VOTERS! Once they require trinkets and the politicians knows this they simply dangle bright shiny trinkets before the voters eyes and you have what you have.

randyandjoy1 wrote on June 03, 2013 at 2:06 pm

Reply to all of you surprised: Hello? You live in Illinois...everyone knows what higher taxes does...they know what they are doing....racing California to be the 1st one down....enough said....and Illinois currently is in the lead!  Congrats voters!

Commonsenseman wrote on June 03, 2013 at 2:06 pm

Amazing, they want to raise more money than they "need" and are talking about how to spend the "extra" money, that thee havent even gotten yet and wont see for nearly a year.  I buy the things I want out of town to save money, Walmart in Savoy is 8% tax Tuscola is 6.75% sales tax.  I go to Savoy for my Walmart and to Tuscola to buy clothes and shoes. Savoy is easier than the Prospect congestion and I go to Tuscola when I am drving that way anyway, over a year its a significant savings, that means more money for my family.  In these hard economic times, I use coupons and plan my purchases to reduce my costs as much as posible.  Its amazing how these politicians think they should just take more and more from us

sweet caroline wrote on June 03, 2013 at 2:06 pm

It's not easy, Randy, to just pack up and leave when you have children in school, all your family is nearby, and a house to sell.

Batmantis wrote on June 03, 2013 at 3:06 pm

I don't see how the council is doing anything extraordinary here. Revenues are down and if we want to maintain decent city services, then more revenue must be raised.

Commonsenseman wrote on June 03, 2013 at 3:06 pm

The problem is this city wastes money and overpays its managers who hinder the police department. Revenues are down at my house too, what am I supposed to do? I spend less, I spend  smarter, maybe they should too

EL YATIRI wrote on June 03, 2013 at 4:06 pm
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In another few years when the tax rate is nearing 15% the politicians will be justifying their action with the same bogus argument: "its not out of line compared to other cities"

EdRyan wrote on June 03, 2013 at 6:06 pm

At the state level, taxes have increased quite a bit.  35 years ago the sales tax was about half of what it is now, and we all know what happened with the Illinois income tax. But the price levels have also doubled, and incomes have increased even if not in real inflation adjusted dollars.  So where is all that money going.  One thing is that development doesn't pay for itself no matter what people say when selling it so there are costs that have to be covered.  And then there is the matter of public pensions that must be funded.  That takes up a huge piece of local budgets and nothing can be cut there.

Budget making usually starts out with the existing budget and then adjustments are made from there.  Another approach is to go with a zero base and require every expenditure be justified.

That quarter of one percent isn't going to have much of an impact on any spending pattern since the cost to drive around is going to be more than any savings on sales tax.  The real issue is how much state and local taxes has crept over the years and are we taxpayers getting value for the money. 

Marti Wilkinson wrote on June 04, 2013 at 7:06 pm

If we look at the last couple election cycles, members of the city council have run for re-election unopposed. How can we expect to make changes on the council level, if quality candidates are either unwilling or unable to step up to the plate? In the last race the only office that was contested was district one, and Schweighart ran unopposed in the election prior to being unseated by Gerard. So saying we need to vote the members out is easier said than done.