Three council members in Elgin unsuccessfully tried to push for residential garbage fees to be tacked onto property tax bills, which would allow residents to deduct them from their income tax returns.
The fees are currently part of residents' water bills. They were part of property tax bills until two years ago, when the city established the goal of diversifying revenue sources.
Councilman John Prigge made the motion Wednesday night. Prigge also proposed that business owners get a rebate for any garbage fees on their property tax bills, or about $14 per month, because they already privately contract for garbage services.
The motion failed in a 6-3 vote. Councilmen Terry Gavin and Toby Shaw voted in favor.
Garbage fees will amount to about $4.5 million in revenue this year. The city directly passes to residents the cost of its garbage contract with Waste Management.
Prigge proposed covering any lost revenue from the general fund surplus, which amount to just under $11 million in Elgin's 2014 proposed budget.
"We don't need to find any money when we have a surplus on top of a rainy-day fund," Prigge said.
City Manager Sean Stegall said the surplus is used as working cash carry-over in the city's three-year financial plan. That surplus gets drawn down to just over $1 million by 2016, he said.
"It is very much needed to balance all three years," he said.
The city could absorb the loss of garbage fee revenues in 2014, but it would have to increase taxes or cut expenditures in future years to achieve balanced budgets, he said.
"I'd much rather deal with this year. We've got a whole year to find more money in the surplus," Prigge said.
Councilwoman Anna Moeller said Prigge's proposal lacked a sound plan.
"We need to have more certainty in our financial plan than hoping we'll find $4.5 million that will materialize somehow," she said.
Councilman John Steffen agreed.
"What you're proposing is what 50 years of legislators have done to us with the pensions," he said. "Throw this budget out of whack so in future years we're faced with future tax revenues and future increases to the budget."
Mayor David Kaptain pointed out the contract with Waste Management expires next year. Fees are expected to increase in the new contract, so any discussion should wait, he said.
"We should continue the course of lowering property taxes so we can encourage businesses to move into our community," Councilman Rich Dunne said.
Elgin's focus on diversifying revenues reduced property taxes in 2013, but residents are paying more overall if one counts garbage fees and new utility taxes, Shaw said.