Sales tax spending up for council review
CHAMPAIGN — Customers for more than five months now have been paying an extra quarter-cent sales tax in Champaign, and city budgeters expect the increase will bring in $3 million during the first full fiscal year they will collect it.
That's a bit more than their estimates when the city council approved the tax increase last summer. The quarter-cent increase became effective Jan. 1 and receipts started coming in a couple months later. With a new budget year beginning July 1, officials are now finalizing how to spend the first full year's worth of extra sales tax money.
City council members will look at the list administrators are recommending when they meet in study session at 7 p.m. Tuesday in the Champaign City Building, 102 N. Neil St. Some are recurring expenses and will remain in the budget for years to come. Others are one-time costs that will only occur next year.
But between July 1 of this year through June 30, 2015, here's what residents should expect to get in return for the extra 25 cents they pay on every $100 worth of taxable goods they purchase:
— $630,000: Salary and benefits for six new police officers to get the department back to its pre-recession staffing level.
— $470,000: Fire department overtime pay, which is necessary to keep a fire engine on the city's west side in full service. The extra overtime budget lets the fire department call in firefighters to cover when others are sick or on vacation. Without it, the staffing level often would fall to a point below where the department could staff all its trucks.
— $277,659: Debt payment on the main library building on Green Street. Although the library is part of city government, the two maintain relatively separate budgets. This year, however, the city will pay the library's portion of the debt remaining from building the new facility. That's enough to keep the library budget above water for one more year, but city council members asked library officials to return with a new proposal next year.
— $327,273: City officials will use this amount, along with $355,000 from "other sources," for economic development projects. That includes a $75,000 virtual small business incubator — a "web portal providing access to all existing programming that supports small business startup" — according to a memo to the city council. For $227,273, a small business assistance program "that could be used to address any missing areas within the existing small business assistance programs in the community," like buying down rent, equipment purchases employee training and other typical startup expenses. Another $25,000 of the sales tax revenue (plus $50,000 that had already been budgeted) will help promote and market the availability of Urbana-Champaign Big Broadband to attract and retain businesses.
— $959,575: Of that, $300,000 (plus another $200,000 from sources other than the sales tax) will go toward fixing potholes after a harsh winter. Another $549,575 will help chip away at the city's backlog of street patching projects. Finally, $110,000 will go toward new safety features at the pedestrian crossing at Mattis Avenue and Sangamon Drive.
— $250,000: This amount from the new sales tax revenue, along with another $250,000 from other sources, will go toward paying down police and fire pension liabilities and mitigate yearly fluctuations in what the city expects it will have to pay toward those funds in the future.
— $85,493: This amount will go into the city's reserve funds — essentially a rainy day savings account for unexpected costs, natural disasters or — in situations like the city experienced during the recession years — when revenues fall short of projections.
The city council will still need to approve of this list in a formal budget vote within the next couple months. City administrators have also sent council members alternatives of how they might tweak the dollar amounts they allocate, but in general, the projects stay roughly the same.