Prussing asks Urbana council to raise sales tax by 1/4 cent

Prussing asks Urbana council to raise sales tax by 1/4 cent

URBANA — Citing a $1 million budget gap "which can pretty much be attributed to Carle," Mayor Laurel Prussing is proposing a one-quarter percentage point increase in the city sales tax to match a move Champaign made earlier this year.

Prussing said the sales tax increase would bring in an extra $686,000 annually, new revenue it needs to cover losses from a Carle Foundation Hospital property tax exemption and rising costs of employee health insurance — which Prussing also blames on Carle.

She plans to make her proposal to the Urbana City Council when it meets at 7 p.m. Monday in the Urbana City Building, 400 S. Vine St.

The quarter-point sales tax increase would move the city's portion of the tax to 1.5 percent. Including the state and other county rates, the overall sales tax in Urbana would total 9 percent, up from 8.75.

"These are existing taxes," Prussing said. "They don't cover food and medicine."

Prussing said she will make her proposal to match the sales tax increase the Champaign City Council approved this summer. Both taxes would be effective Jan. 1, 2014.

Monday's presentation will be the first city council discussion of the increase, but the mayor is pushing to have formal approval soon, as it takes several months to get a new sales tax rate into the state collection system.

"It needs to be done quickly because the state takes some time to implement it," Prussing said.

City officials said they were jarred earlier this year when the state approved a nonprofit property tax exemption for Carle Foundation Hospital. That will erase $831,380 in property tax revenue for the city alone and millions more for taxing bodies throughout the county.

City officials expect the rest of Urbana property owners will need to cover Carle's portion in the future. But because of the timing of the state's decision on the exemption, that revenue will not be collected at all for this budget year.

Prussing said Health Alliance, a Carle affiliate, has proposed increasing the price of city employees' health insurance $344,060.

Because the sales tax increase would take effect halfway through the fiscal year, which runs July to June, the city would only collect half of the new revenue in this budget cycle. Even if city council members sign off on Prussing's proposed sales tax increase, they will still have to address a $660,000 budget gap.

"We will need to keep working on ways to bridge the remaining gap of approximately $660,000 and will offer more proposals shortly for your consideration," Prussing wrote in a memo to the city council.

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Lostinspace wrote on August 23, 2013 at 7:08 pm

Fine with me.  I can't think of a reason why I would shop in Urbana.

ROB McCOLLEY wrote on August 24, 2013 at 5:08 am
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If you did, I can't think of a place that's not food or medicine.






Oh wait, there's Carter's Furniture.

Daxndata wrote on August 24, 2013 at 7:08 am

Should I paraphrase a skit from the "Saturday Night Live" television show?  You know, the series of skits with Dan Akroyd and Jane Curtain acting as news anchors.  SPecifically the part when Dan gets his chance to rebutt Jane's Comment.  It starts with, "Jane you ignorant..." Well maybe I should stop there because I would replace Jane with Laurel.  Stop crying like a little child.  Carle has been relieved by the State of Illinois from paying property taxes.  Stop with your complaining.  Start leading!  Seems to me that there might be a lot of your (former) supporters are beginning to wonder how you could have fooled them into voting for you...TWICE.  Cut your budget to meet your income instead of trying to squeeze even more money out of people for you to waste as the (alleged) leader of the people of Urbana.  We the people DO NOT wmat more of our money being siphoned away from our pockets to yours!

ROB McCOLLEY wrote on August 24, 2013 at 8:08 am
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She might have seen it coming, and been prepared for it, if the City of Urbana had retained an Administrative Officer with education & experience comparable to a city manager.

Danno wrote on August 25, 2013 at 12:08 pm

HaHaHaHa!!!....That's a good one out of the archives; SNL had some creative writers, 'fer sure. In addition to Laurel for Jane; how 'bout...I dunno...Vin Diesel for Dan? ;D

pattsi wrote on August 24, 2013 at 7:08 am

Just to put into perspective the present Champaign sales tax and the proposed Urbana sales tax of and to 9%, the Chicago sales tax is 9.25%. Is not the bigger question as to hat is happeing with the money generated here in that we need a tax .25% less than Chicago?

787 wrote on August 24, 2013 at 11:08 am

So.... how will the City of Urbana compensate for the lawsuit?  Did the Queen not think that a move like that would go unnoticed?   Or does she simply not care?

Just like Obama, the Queen always wants it to be about her. 


I'm so glad the News-Gazette endorsed the Queen when she was up for re-election... and then a single-digit percentage (it was less than 10%, right?) of the voters in Urbana put her back in office.

Reap what you sow.

Danno wrote on August 24, 2013 at 1:08 pm

I'm really bad at identifying 'dangling particples' and what not; do you mean to match Chicago's Rate or, go less than what it is now? Schucks, the current gas price at the Chevron station in the Princeville area at 5-4280 Kuhio Hwy near Ka HaKu, Hawaii is $4.89....would you call for a 'price match' here? Guess I need an ENG099 refresher. oops...replying to pattsi...

pattsi wrote on August 24, 2013 at 4:08 pm

I can not find the dangling participle. In any case, I am simply pointing out that Chicago has the highest sales tax rate in the state at 9.25 %, which was reduced .25% as of 1 Jan 2013, and now Champaign and maybe Urbana will be second with 9%. I just have trouble appreciating our need to be second when it comes to sales tax rate. Actually, let me correct my statement, River Grove has a rate of 10%.

In case you really get curious, go here to look at the tax rates throughout the state

For further comparison, here are the rates for other large cities:

New Yok City rate is 8.875%

The aggregate sales tax rate for LA is 9-10%

San Franciso's rate is 8.75%

sanjuan wrote on August 24, 2013 at 4:08 pm

Pattsi, trying to figure out just what the point is here.  Kind of reading between the jumbled lines, is the question if Urbana matches Champaign at 9% is it somehow out of line to be just .25% behind Chicago?   Maybe.   Would be interesting to know what the return is on a per capita basis.  Urbana does have to provide fire protection, policing and other municipal services to a great many properties not on the tax rolls including the Champaign County Courthouse, the Champain County Brookens Center, the Champaign County Jail, the Champaign County Nursing Home, the Champaign County Highway Department, the Champaign County 911 building.  Which of those facilities would you like to be serviced to a lesser degree than they are now?

pattsi wrote on August 25, 2013 at 3:08 am

The whole county has been hit by the reduced property taxes related to Carle and Presence--not to the extent of Urbana. My main point is the importance of all of the taxpayers to pay attention to the various city and county budgets. Not many citizens do. Budget time comes and goes and the citizens do not attend these meetings, meaning that most citizens do not understand how the tax dollars are being spent. When a tax increase is proposed or a referendum to raise taxes appears on a ballot, very few thoroughly understand why this may or may not be necessity or come forward to offer alternatives than raising a tax rate.

For example, next Monday, Tuesday, and Wednesday the CB will be in the 2014 budgetary study sessions. Then in Sept. and Oct. the public will have a chance to offer input about this budget. The county has huge upcoming expenses--jail, nursing home, courthouse repair, roads, etc. In past years, the public does not participate. If there is no participaion, how can the CB integrate concerns of the public into the final budget decision. So I invite the public to be engagd during this process. Talk with your county representative. Come to the meetings. Point out places where the county might save money, rearrange the spending, suggest ways to spend more efficiently. Do you know that the county spends $891,000 plus on the utilities for the buildings connected with criminal justice? How can this be reduced?

Stings600 wrote on August 25, 2013 at 11:08 am

It is a bit low for her to blame an organization that donates millions of dollars in free health care to the community on an annual basis and a branch of that organization that is only keeping step with the "Affordable Care Act" that a large majority of her constituents militantly support. You can't have it all, Laurel. Start cutting programs.

art wrote on August 26, 2013 at 9:08 am

For many years hospitals had tax exemption and Urbana manged withou their tax funds.  Then decisions indicated that they lost exemption for selected years.  Illinois legislature passed statute which city knew would result in exemptions again.  So why not just plan for not having that money just like it was for most of the city's history?  No instead they follow the lead of Champaign and say let's raise a tax. 


Sort of like the cities and University saying let's get the" Free" federal money for UC2B without planning how to pay to run and maintain it after it is built.  Shouldn't all these "planners" on the city and University staffs done that before asking for the "free" money