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updated: 11/6/2012 6:11 PM

Elgin proposed budget has lower property taxes, few major expenditures

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The City of Elgin's proposed 2013 budget includes a substantial decrease in property tax revenue, made up by rising income, sales and telecommunications tax revenue as well as money from taxes that took effect in 2012.

City Manager Sean Stegall said the third consecutive year of property tax reduction is consistent with city council policy. The goal laid out in the 2012-2016 financial plan was for a 25-percent reduction in the property tax levy by the fifth year.

Taxes on alcoholic beverages, natural gas and electricity that took effect July 1 were meant to bridge the gap made by lowering property taxes. The city council approved the new revenue sources as a move toward diversification.

But in the 2013 budget, property taxes are being reduced by more than the new tax revenue replaces.

"Because our other revenue sources did better than expected, we're passing every dollar of that additional monies back to the citizens in the form of a property tax decrease," Stegall said.

Councilman John Prigge has argued against the revenue diversification, saying it hurts homeowners by reducing their property tax bills but charging them elsewhere, in a non income tax-deductible format.

Stegall called the 2013 budget a "status quo" budget. Major expenditures are for vehicle replacement, building maintenance and police and fire equipment.

"It's a very no-frills budget," Stegall said.

Revenue from fines is expected to go down for 2013, primarily because of reduced parking violations, according to Stegall. The city council approved changes to parking regulations developed by the Downtown Neighborhood Association and city staff members last year.

Stegall said the city's policy is to impose fines as a way to change behavior, not make money -- the new parking regulations are seeing high levels of compliance, so ticket revenue is down.

Stegall will give an overview of the budget to start a special meeting of the city council at 7 p.m. Wednesday in city hall, after which council members will discuss the general fund. Budget meetings are planned for the rest of the month to discuss the recreation, riverboat, water and utility funds before the final document is approved Dec. 19.

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