Champaign council votes 8-1 for sales tax increase

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.

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thelowedown wrote on June 04, 2013 at 11:06 pm

If it means adequate fire protection and an adequate number of police officers, I am all for this tax increase. Taxes and tax increases are not popular but the fact is sometimes they are necessary. Champaign has made many cuts because of the recession and now it is time to protect essential services in order to help grow the city. While the sanitary sewer fee and local motor fuel fee are relatively new user taxes, we should applaud the fact that these monies are now for a dedicated purpose. While Mayor Gerard recommends using the extra money from a rising sales tax to fund economic development, I wonder if it would not be better to find some way to rebate that money to businesses once it comes into the city coffers.  As for the library, I believe in the value and power of public libraries, but it is possible for the library to cut some hours, such as some mornings or middays during the school year while having regular ‘all-day’ hours during the summertime and school breaks?

Commonsenseman wrote on June 05, 2013 at 12:06 am

It doesnt change things, and you will see the tax cause people to shop elsewhere, as I will.  They will spend the "extra" 1.1 million that they wont have, this gang of 8 will essentialy make Champaign into a little California, look now as people prefer to move to Mahomet , St Joseph Savoy Monticello to escape this.  Been to Best Buy lately, lotta people looking not alot buying.  Mayor Gerard may be spending too much time with his extracurricular problems distracting him from  protecting us serfs from his taxes.

Fedupwithstatereps wrote on June 05, 2013 at 9:06 am

No, I NEVER go to Best Buy.  Hate that place.

thelowedown wrote on June 05, 2013 at 2:06 pm

"little California"?

I'd love it. Jerry Brown's been doing a great job.

http://www.nytimes.com/2013/05/26/us/californias-new-problem-too-much-money.html?hp&_r=0

C in Champaign wrote on June 05, 2013 at 5:06 am

This will not be the end of it. Wait until they get around to setting property tax levels for the coming year. Once a vampire has tasted blood... 

As for the "additional" funds. Why is the Mayor in such a hurry to spend the money? Is there anything wrong with building an emergency fund that could be tapped for extraordinary items that come up during the year, or next year, or the year after that? Like say when the library comes forward next year and says they need another half million or they will have to cut back hours, AGAIN? It's really too bad so few council members have experience running for profit businesses. It might give them a better idea of how to mange expenses.

fflkommish wrote on June 05, 2013 at 12:06 pm

so how does Champaign's sales tax now compare to Urbana?

what is the sales tax rate in Champaign when you go to a restaurant?

fflkommish wrote on June 05, 2013 at 5:06 pm

So from a sales tax basis it will be cheaper to drink and dine in Urbana.  Champaign should be ashamed.

CodySimmons wrote on June 06, 2013 at 1:06 am

Chamber of Commerce Response (posted on Facebook):

Regarding last night's vote to increase sales tax in Champaign:


We are extremely disappointed with the Champaign City Council's decision to add an additional tax burden on the businesses and residents of Champaign.This issue has never been a question of support for police; fire or library services.The Chamber believes that, in particular, police and fire services are the core functions of government. However, if there is not funding available through the existing tax and fee assessments already dedicated to these core functions without increasing additional revenue, it begs the question... what is the city spending taxpayer money on? 

By issuing a proposal to increase revenues on Friday, May 24 for a May 28 meeting, with a Monday holiday in between, the city demonstrated a lack of transparency and seemingly a lack of interest in gathering the public's input. Council members repeatedly noted that the council had been debating this for weeks.The problem is that the council debated it behind closed doors with each other and not in the public.

In their May 24 memo to council on potential expenditure reductions, the city staff states there was no review of potential cuts in preparing this year's proposed balanced budget. Yet city council continues to insist it has conducted a line by line budget review; made a good faith effort and could still find no opportunities for cuts. City council members cited over and over the "deep" cuts that the city has made to the budget over the past five years. However, the reality is that in the past five years, the city has cut, on average, only 1 percent a year out of the general revenue fund of the city budget.

Simply put, the vote was just bad. It was bad for residents; it was bad for business. Proponents of the tax want people to view the tax isolated from all other revenue increases (4 cent gas tax; sanitary tax increase and stormwater utility fee increase) and spin this that residents and businesses shouldn't mind paying a little more for products and goods to have extra police, fire and library services. This vote should not be viewed as a small sales tax increase, but viewed as a problematic pattern in government. We can not tax and spend our way into prosperity. We can not strengthen the municipal budget on the backs of the residents and the businesses that the municipality is supposed to serve. 

Twenty plus Chamber member comments were included in our second letter to city council and many Chamber members contacted council members directly. The message was clear and consistent - take a serious look at cuts before putting another burden on the businesses and residents of Champaign. Unfortunately, only one council member wanted to hear your concerns and that was Deb Frank Feinen. We thank Ms. Feinen for casting a vote that demonstrated fiscal responsibility and good stewardship of tax payer dollars. 

The Chamber thanks all our members who provided feedback on this issue and contacted council with their concerns.