Frustrations apparent between council, chamber

Frustrations apparent between council, chamber

CHAMPAIGN — With Champaign County Chamber of Commerce officials concerned about the budget forecast in Champaign, frustrations about years' worth of tax and fee proposals have become apparent.

Chamber officials say the addition of a number of business costs over recent years is hurting the city's business climate. Champaign's mayor and deputy mayor say chamber officials should take a more holistic view.

With the city's structural deficit projected to continue into at least the next several years, chamber officials are expecting more taxes and fees. But they are asking for city officials to hear them out before the city looks for more revenue increases to close an expanding gap between the ever-increasing costs of running a town and annual revenues that have flattened through years of economic recession.

Chamber of Commerce President and CEO Laura Weis said there is no animosity between the chamber and the city council despite years of disagreements and, two weeks ago, a very public denouncing of the chamber's political positions by council member Tom Bruno and Mayor Don Gerard.

On Oct. 22, chamber board Chairman Michael Wozniak rose to ask the council to consider the chamber's zero-based budgeting principles. He said city council members should look for more efficient approaches to running a city instead of simply approving incremental budget changes each year.

"You have the storm-water utility fees, the motor fuels tax, the home rule sales tax, and yet you're still running this deficit," Wozniak said during that October meeting.

Forbes ranks Champaign's tax climate for businesses lower than nearby Springfield and Bloomington, Wozniak pointed out, and the chamber does not want it to get worse.

"The forecast had indications that there may be looking for increased taxes on top of that," Wozniak said. "I think in the business community — we represent about 1,200 businesses in the county — there's very little appetite for new tax increases in the business community."

Last week, Wozniak told The News-Gazette he did not wish to comment much further. He just wants to see some kind of movement on solving the structural deficit.

"I was hoping to see some resolution to the city's problem, and I don't want to interject personal things into the mix," Wozniak said.

Back on Oct. 22, after Wozniak made his comments, Bruno preceded his response by saying, "I'm going to be blunt about this." He then decried the chamber as being singularly focused on taxes.

Gerard followed up by pointing out government programs which have been beneficial for business in Champaign — storm-water projects have saved Campustown businesses from flooding, he said, and Urbana-Champaign Big Broadband offers technological advances.

"I appreciate the efforts that the chamber makes, in what they do make, but I can't listen tonight to the dire predictions," Gerard said during that meeting.

Other council members followed up by saying they are willing to hear the chamber out. Minutes later, Bruno said his tone "was probably uncalled for," but he reiterated the "history" between the council and the chamber.

The Chamber of Commerce throughout the years has consistently opposed new tax and fee increases proposed in Champaign, and has encouraged members to rise in opposition, too. The familiar way events unfold before the city council has irked some elected officials in the past.

Gerard said on Monday that he wants the chamber to take a stand on other issues, too.

"They're not taking a stand on UC2B. They're not taking a stand on our effort to protect the aquifer," Gerard said.

He also wants the chamber to support the Champaign Public Library, which has its own budget struggles. Gerard said he wants private business to sponsor library activities, and Chamber of Commerce members are good options to do that.

On Monday, Bruno told The News-Gazette that he has not heard from the Chamber of Commerce, nor has he followed up himself. He wishes, though, that the chamber would adjust its mission.

"Every time we have had some proposal for a tax increase or a fee, as predictable as anything can be predictable, they send out a mailing to their membership list saying this is bad and you should be against it and here's which council members voted for it and here's which council members voted against it, and you should call them all," Bruno said.

Bruno said that, if the Chamber of Commerce wants to act politically, it has every right to do that. But he wants chamber officials to see that government action — building roads and sewers and solving flooding issues, for example — can be beneficial to the business climate.

"I kind of think of a Chamber of Commerce maybe as being more a not-for-profit organization centered around boosting the business interests of a community or being hucksters for a certain community," Bruno said.

He added that calling attention to Champaign's business climate rankings below two of its neighbors and visiting city council meetings only when a new tax or fee is on the table does not seem to be a good public message.

"If that's the only story you ever tell, it seems to be kind of a simplistic approach to the world," Bruno said.

Chamber head Weis said, since the Oct. 22 council meeting, she is not aware of any follow-up outside of routine meetings with city administrators. But on the whole, she thinks there is no animosity between the chamber and the city council.

"From our viewpoint, we're a community membership-based association," Weis said. "We're an organization that takes positions; we're politically engaged."

Political engagement will sometimes cause disputes, she said, but she thinks the council and the chamber are able to maintain a working relationship.

"I do think so. We've had positive feedback from some of the council members," Weis said. "I think that, philosophically, there are always going to be differences."

Gerard said he is not so sure. He recalled being visited by chamber officials during his first days in office, but since then, his interaction has been at city council meetings on nights when members are voting on taxes or fees.

"I don't know what the relationship is, honestly," Gerard said.

Chamber officials also say their focus is working with city officials to address a five-year budget forecast that shows a growing gap if no action is taken.

"We simply recognize that the city is potentially facing a $6 million deficit in the future," Weis said. "And that's something that is going to affect all of us."

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Local Yocal wrote on November 05, 2013 at 7:11 am
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"Chamber officials say the addition of a number of business costs over recent years is hurting the city's business climate."

"...they [the Chamber] are asking for city officials to hear them out before the city looks for more revenue increases to close an expanding gap between the ever-increasing costs of running a town and annual revenues [for government] that have flattened through years of economic recession."

It comes down to this: how many small businesses have closed because of the taxes in Champaign? Who now employed in the city government does the Chamber want to take a pay cut, a pension cut, and a healthcare cut?

It's odd that instead of whining about taxes, the Champaign County Economic Development Corporation [a different group than the Chamber of Commerce] takes an entirely different approach toward assisting their membership. They plan on raising $225 million dollars privately toward providing expansion grants and payroll grants with the vision of creating 3000 jobs.

All The Chamber of Commerce knows to do is whine about taxes with a suspicious agenda regarding who they wish the new mayor to be, one Deb Feinen. This vague tactic, without evidence of hardship, the Chamber puts forth looks more like a ploy to smear Gerard as entirely responsible for the structural deficit, entirely responsible for the raised taxes and fees just before election time. At the same time, "hearing the Chamber out" will provide few specifics as to what they wish cut in the city budget lest they offend city employees.

In sum: much ado about nothing but creating bad press for Gerard to usher in Feinen. And The News-Gazette swings anyway at the pitch in the dirt.

ericbussell wrote on November 05, 2013 at 12:11 pm

I would like to thank the Chamber of Commerce for having the political courage and raising concern about the alarming structural deficit faced by the City of Champaign.   I watched the meeting and felt the Chamber acted proactively, professionally, and constructively.  

The Chamber has been taking steps in the right direction with the introduction of the Business Empowered PAC, providing informative and consistent policy updates to raise awareness, and is now appearing at Study Sessions to advocate on behalf of member businesses.  The Chamber is the only organization advocating for more cost-effective government services.   It is no suprise that Gerard and Bruno are constantly try to marginalize the Chamber.  If the Chamber becomes more engaged in advocacy, it will make it more difficult for them to rubber stamp tax and fee hikes.  

Champaign ranked 153/200 in job growth, according a Forbes study comparing similar-sized communities.  Let's face it, that is not very good.  We need community leaders who are willing to enage in the challenging conversations and address the issues that are preventing us from becoming the #1 best community to live and do business.  Pointing to new construction and business and ingorantly suggesting that things are great is the type of leadership that might get elected to Springfield, but it does little to solve our problems.  Yes, we have many things to celebrate and promote in this community, but we clearly have some room for improvement.  

ialdabaoth wrote on November 05, 2013 at 2:11 pm

This is the most dynamic and lively city in Central Illinois. The Chamber's whining is not political courage; it's self-interested political manipulation by people willing to use their money as a political cudgel. It's so much better in Springfield for business -- have these people ever been to Springfield? The business community in Champaign already weilds such disproportionate power than commonsense protections from their malfeasance often do not exist; just look at the situation with tenancy laws compared with Urbana, nevermind the impending eviction and demolition of the Bristol Park neighborhood.

Lostinspace wrote on November 05, 2013 at 6:11 pm

"Dynamic"? "Lively"? You boggle my mind.  Examples?

Local Yocal wrote on November 05, 2013 at 1:11 pm
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This "controversy" raised by the Chamber is nothing but a few business people attempting to control who sits on City Council, using as its tool, The News-Gazette.

The Chamber provides no direction for council regarding specific expenditures; provides no evidence for local small businesses unable to make a profit; posits the 8.9% unemployment rate in Champaign County the entire responsibility of the City Council; denies that its membership ever benefited from a good road, a working sewer, a tax break, a fee waiver, a remodeling grant, or a free liquor license; blames the city council for what happens in Springfield at the state level; and rests its case on what Forbes Magazine and The Tax Foundation puts out based on how cheap it is elsewhere.

The Chamber talks out of both sides of its mouth, reacting to the final budget in June with, "This issue has never been a question of support for police; fire or library services," yet accuses city council of wasting money by asking, "... it begs the question... what is the city spending taxpayer money on?"
The Chamber acknowledges the city government has cut its budget 1% a year for the last 5 years, yet mocks council member Marci Dodds when Dodds claimed, "There is no money sitting idle in any departments. Champaign's money has been well and conservatively managed, and we've made the hard decisions all the way along," insinuating the cuts weren't deep enough without stating which expenditures could go.

And what does the Chamber actively do always after the fact? Complain to the newspaper, complain at council meetings (when they show up) and form a Business Empowered PAC to back council candidates who will do their bidding.
The Chamber has not identified a single line item in the budget that is waste, but concluded what was most important to them: "...only one council member wanted to hear our concerns and that was Deb Frank Feinen. We thank Ms. Feinen for casting a vote [in opposition to the increased sales tax] that demonstrated fiscal responsibility and good stewardship of tax payer dollars." [While ignoring Feinen's support for all the expenditures that required the tax increase in the first place.]

This whole thing is about getting rid of Gerard and warning council members they better do what the Chamber wants from now on.
Nothing more. 

Watch Council Member Will Kyles bow tonight to their wishes, leaving council short on funds, and yet the Chamber will continue to scream about the structural deficit to get Feinen elected over Gerard.

Sid Saltfork wrote on November 05, 2013 at 12:11 pm

Of course the Chamber of Commerce is political.  The previous elections made that clear.  The Chamber of Commerce does not represent anyone except Big Business.  It is "non-profit" as are other lobbies.  Either Bruno, and Gerard are being courteous in their minor criticism; or they are being naive.

Ever go to a Chamber of Commerce social gathering?  They hold them regulary.  Like minded people drinking, and discussing the travails of business.  After a few drinks, they will tell you what they really feel needs to be done in this country.  The personnel people are a hoot with their stories of the untermensh.

Local Yocal wrote on November 05, 2013 at 1:11 pm
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...whatever "the untermensh" is. It certainly doesn't constructively contribute to solving unemployment in this county. The Chamber is behaving as a selfish special interest group that thinks it's the most special of all, all for a few sheckles it wouldn't hire anyone with anyway. I'll assume "untermensh" means conservative theoretical drivel...

Sid Saltfork wrote on November 05, 2013 at 2:11 pm

It means beneath human if my German is still working. 

The unemployment is leading to the underemployment.  There are millions of qualified workers; but their work has changed since they were laid off.  More, and more manufacturing jobs are being lost overseas.  The increasing jobs are in the service industry.  Of course; the increasing jobs offer no benefits, and lower wages.  MacDonald's recently defended it's wages with a statement that it was assumed their workers worked a second job.  The employment future has no benefits, and low wages.  The Chamber of Commerce is okay with that as long as corporate tax rates are low, their politicians are elected, and corporate profits are high.  The Chamber of Commerce is just another front group hiding under the "non-profit" misnomer.

Capiche (Italian).

ialdabaoth wrote on November 05, 2013 at 2:11 pm

Having lived in Springfield and visited Bloomington frequently, the notion that Champaign has a "les favorable business climate" is frankly laughable.

ericbussell wrote on November 06, 2013 at 9:11 am

Forbes magazine is a unbiased third party and job growth is not a very subjective statistic.  We don't have to agree with the methodology used in determining the overall rankings, but it would be prudent to ask ourselves why our community is lagging in job growth compared to other communities and encourage local policy makers to make job growth a priority.

Local Yocal wrote on November 07, 2013 at 7:11 am
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An organization comprised of 1,400 business owners is blaming the government for unemployment? Huh? Is this the same organization that wants its government to stop paying government employees so much? Instead of engaging in bogus, circular arguments why not cut to the chase: Feinen for Mayor! There, don't you feel more honest?

ericbussell wrote on November 07, 2013 at 3:11 pm

So this all a ploy by the Chamber to smear Gerard?  That is creative.   I thought the main criticism of the Chamber is they are always against tax and fee hikes and that their anti tax hike stance is very predictable.  Yet, your theory is this is an election tactic.   I suspect we would not be talking about the Chamber at all if Gerard/Bruno hadn't drawn attention to the issue through their reactions at the meeting and the anti-Chamber PR/smear efforts. 

Local Yocal wrote on November 07, 2013 at 5:11 pm
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Whatever the Chamber of Commerce is doing, it certainly isn't a legitimate economic discussion.

Here's some homework for the Chamber should they decide to get serious, otherwise, it is just a ploy to get homegirl Feinen elected down the road on some Tea Potty platform:

Show us how many small businesses in Champaign County cannot earn a profit because of the taxes.

Show us how many small businesses are not coming to Champaign because of the taxes.

Prove the 8.9% unemployment is because of the City of Champaign's taxes.

How many small businesses in the City of Champaign have gone out of business because of the taxes?

Show us how much money, on average, a small business in Champaign County would be saved and how many employees they could hire if taxes were reduced by whatever the Chamber figures.

Show us how the City's deficit spending caused the 8.9% unemployment?

Does the Chamber know the percentage of the unemployed who are homeowners and still pay property taxes while they remain unemployed?

How does lowering the unemployment insurance tax rate help the unemployed the Chamber is so "concerned" about? 

How is a city council responsible for what the state government does?

Who within the City Government does the Chamber recommend be fired or have their pay cut?

What specifically would the Chamber like to see cut in the City's budget? Pensions? Whose pension? Health benefits? Whose health benefits? Pay raises? Whose pay raise?

These questions are based entirely on the Chamber's expressed concerns. Should be easy, since they're experts on business and employment guys still know how to figger numbers, right?

ericbussell wrote on November 08, 2013 at 8:11 am

I admire the effort to marginalize the chamber and discount the concerns shared by chamber members.  I think the attempt to tag Deb Feinen as anything but a moderate is very creative.  When people are going out of their way to attack the Chamber and council members for simply agreeing to talk to the Chamber, it tells me the Chamber is doing something right and they need to keep it up.

You offered a lot of questions.  I have a few questions I hope we can ultimately answer:

1.  What are we doing to convince prospective employers to build and expand in Champaign?  Why is Champaign lagging in job growth relative to other communities?

2.  How much will a prospective employer be paying in taxes and fees vs. other competitive markets?  Their prospective employees? 

3.  What are the perks that employers and their employees will enjoy here that other communities or do not offer?

4.  What are the key challenges to economic growth in our community and what are we doing to address those specific challenges?

5.  Why should employers and their employees invest in our community when our state and local policy makers seem unwilling and unable to manage within their means without constant tax hikes quickly followed by large budget deficits?

Sid Saltfork wrote on November 08, 2013 at 8:11 am

Do you feel that the tax breaks given to the re-located auto dealership, and the new hotel by Champaign were a good, or bad idea?  Do you feel that the state's tax breaks given to Sears, Motorola, etc. along with the proposed tax breaks to ADM, and a fertilizer plant are appropriate?  Should programs for people be cut so employers can be attracted, or paid to stay, with tax breaks?  Should a bidding war continue for tax breaks?  The Chamber's opinion is known.  What is your opinion?

ericbussell wrote on November 09, 2013 at 6:11 pm

Ideally, we shouldn't need to offer incentives to attract and retain employers.   I have not studied all the scenarios that you referenced, but there are certainly business cases where it is profitable to offer incentives.  I also suspect that there may be larger employers that are leveraging the economic crisis, knowing that our policy makers are not likely to call their bluff.   If a fertilizer plant is not likely to locate here without incentives, does not put any existing businesses at a disadvantage, does not require any up-front investment by the taxpayers, and will provide a substantial return with zero risk, then I think it would be silly not to bid for the project. 

Sid Saltfork wrote on November 10, 2013 at 7:11 pm

Illinois is in competition with Iowa for the plant.  The last bid amount was $34,000,000 in tax breaks for the hiring of 150 permanent jobs, and up to 2500 temporary construction jobs.  Do you think it is a good deal?  What do you think about the ADM tax break deal?

ericbussell wrote on November 11, 2013 at 7:11 am

I understand the fertilizer plant will result in a net tax gain almost immediately with signficant tax revenue generation in both the short and long term.  It sounds like a very good business deal as Illinois taxpayers would realize $0 tax benefit if they choose Iowa. 

Sid Saltfork wrote on November 11, 2013 at 7:11 am

What should be cut in order for our financially strapped state to find the money for the tax breaks?

ericbussell wrote on November 11, 2013 at 8:11 pm

Smart incentive plans will result in more tax revenue and not less.  If you feel that we should not bid on projects for ideological reasons vs. business logic, we will have less tax revenue and it will put even more pressure on our state to cut services and/or raise taxes.    I am not surprised to see bipartisan support for the fertilizer plant project as it seems favorable for Illinois taxpayers.   I think you will find very little support for your extreme position where you exclusively focus on reduced tax liability as a cost while ingoring the overall cost vs. benefit.  I especially like the incentive plans where there is little or no up-front expense to the taxpayer, making the return on investment financially appealing.  

Marti Wilkinson wrote on November 08, 2013 at 7:11 pm

Has Feinen officially announced her candidacy for mayor? I'm aware that Karen Foster has announced her intentions. 

As a resident of Champaign, I'm not ignorant of the fact that sitting council members can have a vested interest in the business developments going on in Champaign. Marci Dodds is married to Cody Solkowski, and he is the CEO of One Main Development. So I think it's reasonable to conclude that she has a stake in the development of downtown. 

As for Gerard, he doesn't need the chamber to throw him under the bus. He does a pretty good job of bringing trouble upon himself. At any rate, the position of mayor is that of a figurehead, and the real 'power' actually is held by Dorothy David. The best thing that the people of Champaign can do, is find 'at large' members to fill the seats when Foster, Bruno's, and Feinens seats are up for grabs.

In Feinens case her political connections go beyond that of the chamber. Her mother was the circuit clerk for many years, and her father tried to get Holderfield kicked off of the ballot when his ex-wife stepped down. Steve Frank was also law partners with Tim Johnson. If she does make a run for the mayors office, I can see a lot of support for her, due to her existing political connections.  

The local talk in the last election cycle revolved around Schweighart running for a final term and Feinen stepping in when he was done. Perhaps it would have worked out better for her if she had run against Gerard directly, and having Schweighart not make another go for the office. Considering the history that the NG has of supporting Republican candidates, it's not a stretch to suggest that her candidacy would have been favored.