Champaign approves tax levy, gives 5-4 support to gas tax
CHAMPAIGN -- City council members on Tuesday night voted to create a new tax, maintain an old one and still ended their meeting looking at potential budget cuts for the next fiscal year.
The nearly $20 million property tax levy the council supported is identical to last year's, even though the aggregate assessed valuation of the city is expected to drop 2 percent. That means, next year, average homeowners would pay property taxes equal to what they paid this year, even if their home values have dropped.
While the actual city property tax bill, on average, would not increase, homeowners would be paying at a higher rate: $1.3209 per $100 of equalized assessed value, instead of the $1.2942 rate the city has adopted in the previous four years. The council voted 7-2 in favor of the tax levy, with Deborah Frank Feinen and Kyle Harrison dissenting.
Council member Tom Bruno said, after several years of cutting millions from the city budget as costs outpaced revenues, it is time to start maintaining services.
"The fact of the matter is that city revenue is drastically down from prior years, and yet people still want us to provide police and fire and snow removal," Bruno said.
Had the council chosen to maintain last year's property tax rate, budgeters would have had $727,614 less to work with.
"At the end of the day, the services that we are providing to the public are ones that they feel fairly inelastic about, and they want these services to continue unabated," Bruno said.
In a separate but somewhat related discussion, in that it concerned a shortfall of revenues, the council took its first step in creating a 4-cent-per-gallon motor fuels tax to address a $60 million backlog in road projects.
City administrators' presentation to council members showed pictures of several crumbling roads in southwest Champaign, but Public Works Director Dennis Schmidt said the unfunded road projects are not limited to any particular area.
"This is a problem that we can find an ample number of examples throughout the city," Schmidt said.
A 4-cent gas tax is expected to generate $1.5 million annually in new revenue for the city -- enough to start chipping away at the aging concrete.
The vote was narrow: a 5-4 poll was enough to put a council bill to a formal vote within the next few weeks. Finance Director Richard Schnuer said, assuming the council affirms its preliminary support, the tax could be in place in roughly 90 days.
Council member Marci Dodds said road conditions are a recurring issue when she talks to residents in her District 4.
"It's good for motorists, it's good for selling our community, and I continue to hear about our streets," Dodds said.
Mayor Don Gerard said the roads are in desperate need of repair, and they will only get worse without the gas tax.
"We need to have a discretionary tax that addresses the issue directly, and we need to fix our roads," Gerard said.
Other council members were worried about the costs to consumers and businesses.
"I think, especially with the economic situation that we are in now, I don't want to see another nickel on this product, another dime over here on this product," said council member Karen Foster. "They do add up."
@IU1977 In case you didn't know, hybrid vehicles do use gasoline, meaning that when they fill up at a fuel source station, they will be paying a tax on the gasoline that goes into their fuel.
As for electric vehicles, I'm sure this will be a huge free ride for them because they are just everywhere in Champaign, especially at all the electric car charge stations!
The extent to how much gasoline a hybrid car uses depends on whether it is a plug-in hybrid (Chevy Volt, 2012 Toyota Plug-In Prius) or what most are more familiar with, the non-plug-in kind (Prius, Insight, etc). Driven locally and plugged in frequently, the plug-in hybrids will use very little gasoline, generating very little tax revenue. Cities like Champaign-Urbana with a higher number of citizens that are environmentally and national-security aware are bound to see a larger percentage of these plug-in hybrids.
HOWEVER, passenger cars, bicycles and electric vehicles do an insignificant amount of road damage when compared to semi-trucks and city busses. The technical engineering unit for the damage done is an ESAL, and a city bus does over 800 times more damage per mile than a passenger car. A double trailer semi does almost 2900 times more damage to our roads. The Virginia Bicycling Federation links to a PDF of a GAO (Government Accounting Office) report claiming the road damage done by an 18-wheeler is the equivalent of 9,600 cars!
In light of this, the local constituency should demand higher taxes on local delivery vehicles and semi trucks that use our roads -- they are not paying 1000-3000 times more in motor fuel/road repair taxes at any -- let alone the local -- level. Many intentionally fill up in nearby states where taxes are lower (it makes good business sense!).
In terms of road repair funding, Champaign-Urbana would have been in much better fiscal shape had they followed the MTD's lead 10 years ago and implemented an electric light-rail tram system on high frequency bus routes. On our local roads, the busses account for one of the highest amounts of heavy-vehcile mileage, however as a public works type agency they pay no motor fuel/road repair taxes. However an electric light rail mass transit system is now as it was then -- the proverbial 3rd rail to bring up -- mainly due to derision by those that lacked the foresight to see the possibility of increasing gas prices and economic downturn and now say that now is not the time to dream big and invest in our future.
As folks tighten their belts due to the economy and vehicles and local roads become more fuel efficient (and more alternative transportation is used, such as walking, bicycling and use of plug-in electric/hybrid vehicles), both MTD ridership will increase and less fuel will be purchased by taxpayers with those efficient/alternative fuel vehicles. This will increase road wear while decreasing both state, federal and local motor fuel tax revenues and put us right back where we are today even with a 4-5 cent local gas tax (which semi truckers will do their best to avoid as they have huge tanks and can both time when and where they purchase as well as having a huge economic incentive to drive further to fill-up).
A much more progressive (and fair!) tax would be to tax based on the damage done: a vehicle sticker based on odometer reading and vehcile weight. When a police officer stops you for a moving violation, and your road tax sticker is out of date, stiff penalties and fines. This is how it is done in other countries that have more experience with alternative fuels (e.g. New Zealand, Germany)
If you're so inclined to read engineering articles, you can find the source for my assertions backed up by Phillip A. Viton, Ohio States Associate Professor of City and Regional Planning and co-director Joint Program in Urban Transportation' PDF of his presentation "Understanding Road Wear and its Causes"
Vote out all of the people who voted for this gas tax. My power, cable and especially cell phone bills all have ridiculous Champaign municipal taxes on them and now they want to add 4 cents a gallon to my gas? Where does it stop? They will end up using this money for more wastful spending and not for the purpose of repairing roads. No wonder there are 900 houses for sale in Champaign. No one wants to move here. If I want taxed like this I'll move to Chicago. Time to replace multiple members on the city council.
Come on now, what about this surprises you really? I have never seen such ridiculous taxation, but yet who votes for these people continuously? I would love to know where the original tax money went, I know for the past few years every new road or project I saw had a "paid for by federal TARP money" sign by it. And you can bet they will be looking to hit cigarettes again, because that's really all the management skills there are, keep hitting what we know. Not that an alchohol tax would be a generator, but since bars own this town I guess that's taboo. I cannot wait for the market to recover so I can sell my house and get out of this tax hole...
It's not taxing "what they know" it's taxing what they know people have a choice to purchase (or not). Taxing cigarettes and alcohol is just fine with me - if you don't want to pay the tax, then don't buy the products. Taxing gas is a little different, because obviously it would be more of a hardship for a working parent to schlep kids to school(s) that are quite possibly not anywhere near where they live and also get to work on time without driving a car, for example. But there are options for people to avoid the burden of the gas tax (bike, bus, carpool) so it's certainly better than an across-the-board tax in that regard.
Government services are not free. What Bruno and the others are saying is that in order to provide the services that Champaign citizens are telling them they want to have, money needs to be raised. They are not talking about small change, and the budget cutting options that would produce savings comparable to the revenue generated by this tax would only come from cutting services, which apparently Champaign residents don't want to do. If residents don't want to cut Fire staff overtime, or have a Police Department with a front lobby that closes every night, then money has to be created to pay for it.
Exactly. People who demand services but whine about taxes have no credibility. If you don't want to pay taxes, move to a place that provides fewer services. If you want to consumer government services, accept that you'll have to contribute to paying for them. The sense of entitlement to have services but not help pay for them is ridiculous.
Somalia has very low taxes -- the anti tax brigade should consider relocating to that 'small government' libertarian paradise.
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