Champaign council votes 8-1 for sales tax increase
CHAMPAIGN — A quarter-percentage point sales tax increase passed with little resistance from audience or city council members on Tuesday night, and the surcharge city officials will use to pay for police, fire and library services will go into effect Jan. 1.
In an 8-1 vote, city council members gave final approval to the $2.8 million per year revenue generator on the same night that they approved a $114.6 million budget for the coming fiscal year.
The sales tax increase, which brings the rate from 8.75 to 9 percent, will pay for six more police officers, keep a fire engine in full service on the city's west side and keep the library open on its current schedule for at least one year.
Those three items collectively will cost $1.7 million annually. City council members will discuss in the coming weeks how to use the remaining $1.1 million.
The sales tax increase was one vote among a slate of budget-related ordinances on Tuesday night. Among those was a sanitary sewer fee increase — which, like the sales tax increase, council members had supported in the past few weeks and finalized on Tuesday.
At 6-3, however, the vote on the 6 percent sanitary sewer fee increase was a bit more narrow. It immediately followed the sales tax vote, and three council members said they could not support another tax or fee increase after approving the sales tax.
City council members nonetheless adopted a fee of $3.02 per average daily cubic feet of water usage, up from the current $2.85 rate. That means a typical single-family home using an average of 25 cubic feet of water per day — or about 187 gallons — would pay $75.50 annually, up from the current $71.25
Without the increase, city officials had said the shortfall likely would lead to more sewer breakdowns and sewage backups on private property.
"I feel like, as council member (Will) Kyles suggested, I don't have a problem using funds from our home-rule (sales) tax increase to support needs in this arena and cannot support another tax," said council member Paul Faraci. He joined Kyles and Karen Foster in voting against the sanitary sewer fee increase.
Mayor Don Gerard supported the sanitary sewer fee increase and said the extra money left over from the sales tax increase could be used to pay for economic development incentives.
"I say if we're going to have a surplus in the other one (the sales tax), let's spend it on something that's going to be an investment in the future," Gerard said.
Deborah Frank Feinen, the only council member to vote against the sales tax increase, was among the six voters who approved of the sanitary sewer fee increase. She said she was more comfortable with raising the sanitary sewer fee because, unlike the sales tax, it is charged based on water use — in other words, users pay for how much stress they put on the sanitary sewer system.
She did not make any public comment about the sales tax on Tuesday night. But for the past few weeks as the proposal made its way through city council deliberations, she said she wanted city officials to spend a little more time looking for budget cuts before they increased revenues.
Council member Marci Dodds, who has supported the tax increase as a way to pay for those police, fire and library services, said she takes issue with the thought that city officials have not already looked for cuts. Dodds said they have been going "line-by-line" through the budget since the recession took hold in 2008.
"There is no money sitting idle in any departments," Dodds said. "Champaign's money has been well and conservatively managed, and we've made the hard decisions all the way along."
The Champaign County Chamber of Commerce has been critical of the tax since it got support in a city council straw poll last week, but no one from the chamber made public comment on Tuesday. The only audience member to speak, Craig Walker, was supportive of the tax increase.