Council should rethink tax hike

There's a disturbing pattern in local government — one tax increase after another.

When the hard times come, both the public and the private sector have to re-evaluate priorities and cut their spending. When the hard times persist, the private sector has no choice but to continue to tough it out; only the public sector can command new revenue.

That's the political reality on display in the city of Champaign, where concerns over maintaining library hours, hiring more police officers and paying firefighters' overtime have prompted city council members to embrace a quarter-cent increase in the sales tax. In a straw poll, the council voted 8-1 last week in favor of the proposal. Only Council Member Deb Feinen voted no.

The city needs $1.7 million to fund these programs while the new tax will generate an estimated $2.8 million. Don't worry about the difference. City officials will find a way to spend that, too.

The proposed quarter-cent sales tax increase, which will be the subject of a formal council vote on Tuesday, is just the latest in a series of local tax hikes, some small and some big. There has been an increase in the gas tax, the storm water utility tax and the sanitary sewer tax.

Our advice is to slow down. The proposal was made public May 24, tentatively approved May 28 and is scheduled to be formally approved on June 4, a breakneck pace that belies the concept of a deliberative process or any other thoughtful study of alternatives.

It's understandable that council members would be concerned about such core municipal functions. But it's important to remember why cuts were forced on them as well as on other city functions — the recession. While economists now say the recession is over, it's hard to tell the difference between what everyone experienced beginning in 2008 and what they're experiencing now.

Times remain hard. Unemployment is too high. The state is in financial shambles. Businesses are getting by on a shoestring. Municipal revenues are insufficient to support desired services.

In that context, why should government officials, who are understandably tired of making tough budget choices, be allowed to bail themselves out by raising one tax after another?

Laura Weis, executive director of the Champaign County Chamber of Commerce, makes a valid point when she said the pattern of tax hikes sends the wrong message.

"If we keep increasing the cost of doing business, we're less competitive than our neighboring communities," she said.

Council member Feinen made a similar point at last week's council meeting when she suggested that the council needs to take a more in-depth look at city spending and see what other cuts can be made to maintain the police, fire and library services. Perhaps council members could individually evaluate those three services. Does the city really need to pay firefighters overtime to maintain a service it was prepared to end just a year ago?

It may seem counter-intuitive, but a tax increase really is the path of least resistance. Apathetic voters don't pay much attention to local government. Most of them didn't even know about storm water tax increase until they recently started to get the bills. A quarter-cent hike in the sales tax won't draw an angry mob to city hall.

Nonetheless, another tax increase — particularly one not limited by a sunset clause in a city government that larded its budget with surplus funds — is an unwise move, reflective of the haste with which the idea is moving from the drawing board to the municipal code.

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EL YATIRI wrote on June 02, 2013 at 9:06 am
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They run for office promising fiscal responsibility.  Once elected they spend without long term planning and don't budget realistically. Then they exact more tribute.

rsp wrote on June 02, 2013 at 5:06 pm

The city is expanding and the need for police and fire services are growing. The calls  for police because of gunfire are increasing and the weather is getting warmer. Wait till the 4th of July and see how you feel. Maybe we don't need to be proactive, we'll just complain after the fact that they aren't doing their jobs, right?

parkmymeterelsewhere wrote on June 02, 2013 at 9:06 pm

What?  Both cities have not seen growth in populations or otherwise for the last decade; if anything a decline in sprawl.

Nice Davis wrote on June 02, 2013 at 9:06 pm

Both Champaign and Urbana posted double digit percentage growth between 2000 and 2010: http://www.news-gazette.com/news/local/2011-02-15/data-begins-arrive-2010-census.html

ROB McCOLLEY wrote on June 02, 2013 at 10:06 pm
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There's a disturbing pattern in local government — one tax increase after another.

 

You endorsed Prussing twice.  Now you complain.

 

Hint: retirees are good at fixed-incomes, bad at economic development.

 

 

EdRyan wrote on June 03, 2013 at 5:06 am

That sales tax rate is about double what sales tax rates were in the mid 1970's.  Probably indicative of the cost of government increasing at a faster rate than the general price level.

There is also that old story that development pays for itself.  Apparently not.

pattsi wrote on June 03, 2013 at 6:06 am

Champaign paid for two studies about the relationships between economic development and what this generates in the way of tax dollars for the community. Study results showed all development is not equal. Only certain types put money in the city coffers, such a McMansons, certain types of big boxes, and not much more. The rest of  what is termed development, such as more housing, general businesses, etc, especially when economic incentives are in play, does not. The major goal based on these studies is that that a very large proportion of any development ought to keep the dollars in the community. A potentiael scenario should "high speed rail" become a reality in several decades is that the community could have an even harder time not generating sufficient tax dollars as Champaign turns into a bedroom community for Chicago.

Just a reminder in 2014, Unit 4 will be putting a referendum on the ballot, and potentially the county might have to generate monies for the jail, nursing home, and airport.

parkmymeterelsewhere wrote on June 04, 2013 at 9:06 pm

The census growth is c-u was all in the first part of 2000-05 and has severely tapered off from 2005-10 with several losses/cutbacks at many levels of business.

So the census does not reflect this obvious downward trend that occurred before the housing bubble.

Nice Davis wrote on June 05, 2013 at 10:06 pm

The most recent ACS estimate places Champaign's 2012 population at 82,517, a 1.8% gain over the 2010 ACS estimate.

Are your assertions coming from anything other than your "gut feeling"? I suspect not, but I'd be curious to see your contrasting numbers if they exist.