Urbana council defers sales tax vote

Urbana council defers sales tax vote

URBANA — The debate over a quarter-cent increase in the city sales tax will continue for at least two more weeks after two city council members asked for the vote to be deferred until they could more fully understand the budget picture.

Mayor Laurel Prussing has proposed the increase as a way to shore up part of a $1 million budget gap. The increase would move the city's portion of the sales tax to 1.5 percent and the overall tax to 9 percent — that's the same as Champaign after it passed an identical increase this summer, among the highest in central Illinois and one-quarter percentage point below Chicago's sales tax.

Alderman Michael P. Madigan, R-Ward 6, made the move to defer the vote. Per city council rules, it only takes a motion and a second to that motion to avoid a vote at least until the next meeting — a one-time move he would not be able to use again next week.

Prussing said she thinks she has at least five votes in support of the sales tax increase when that time comes.

The city council is working under a deadline — city officials need to inform the Illinois Department of Revenue by Oct. 1 if they want a change in the sales tax to be effective Jan. 1.

Madigan said he is "in no way" considering that layoffs would be the answer to the city's budget questions, but he does want more time to scour the budget line by line to see if there might be alternatives to the sales tax increase.

Alderwoman Carol Ammons, D-Ward 3, seconded his motion. She said she wanted more time, too.

"The impact on the poor is evident, and the district that I represent has a high number of people who are struggling currently with the tax issue," Ammons said.

Prussing expects the sales tax increase would bring in an extra $686,000 annually, new revenue she says 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.

Alderwoman Diane Marlin, D-Ward 7, said she dislikes tax increases but thinks it was necessary this time to maintain a baseline of city services. Still, she added, city officials have a lot of budget work remaining.

"This is not going to solve our problems," Marlin said. "There are a lot of unknowns out there."

Because the increase will be effective halfway through the fiscal year, city officials expect to collect only $343,000 in this budget cycle. That leaves a remaining budget gap of about $640,000, for which Prussing proposed spending cuts on Tuesday night.

She said $178,500 has already been cut by consolidating positions in the public works department and by closing the police front desk for six hours between 11 p.m. and 5 a.m.

She said she also thinks the city can find money by reducing its employee health care plans — which she said is the "Cadillac" plan and among the best of any employer in Champaign County. Prussing thinks some employees might prefer to switch to plans available under the Affordable Care Act, which could save money both for employees and the city.

Speaking in support of the sales tax increase, Jason Scott, a city public works employee and president of the city AFSCME union, asked the mayor to budget for the same level of public works and police department front desk services that were provided last year.

"We don't want to see the city reach a breaking point with the staffing numbers and the services we are able to provide," Scott said.

Nobody from the local business community spoke to address the sales tax increase, but University of Illinois graduate student Dan Elg said before the vote that the city should look for a "bigger picture solution."

"It's time to finally start balancing the scales," Elg said. "Let's take this opportunity to make Urbana more business friendly than Champaign in one way."

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