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.