Des Plaines OKs gas tax hike, other rate increases

The Des Plaines city council this week approved a controversial gasoline tax hike, and increased various other taxes and fees for next year to fund operations, eliminating more than half of what would have been a more than $5 million deficit.

Several city aldermen who had questioned whether the city should be raising gasoline and electricity taxes during tough economic times had been hopeful for a lesser gas tax increase, which did not pass at an earlier meeting.

This week, aldermen Patricia Haugeberg, John Robinson, Matt Bogusz and Rosemary Argus voted for the two-cent-a-gallon gas tax increase, while Jean Higgason, James Brookman, Mark Walsten, and Dan Wilson voted against it.

Des Plaines Mayor Marty Moylan broke the tie, approving doubling the local option gasoline tax to provide increased funding for street drainage system improvements and the city's rear-yard drainage program in 2010.

"I go to ward meetings all over the whole city and residents have made it clear that they want flood protection," Moylan said. "They've made it loud and clear, when we go to these meetings, they want flood prevention projects completed. They want stormwater to drain. They want backyard flooding to stop."

The new gas tax is effective Jan. 1, with a sunset provision of Dec. 31, 2013. It will generate an additional $800,000 a year for the city.

The following tax rate/fee increases were also approved as part of the 2010 budget:

• A water rate increase of 5.7 percent or 18.4 cents per 100 cubic feet effective Jan. 1. The new rate would be $3.412 per 100 cubic feet. Officials said the increase is a pass on from the city of Chicago, the water supplier. A homeowner using an average of 5,000 gallons of water per month would pay roughly $15 more yearly.

• An increase to the storm sewer fee of 33 cents per 100 cubic feet to accelerate the timeline of improvements identified in the stormwater master plan. The fee increase is effective Jan. 1 and sunsets Dec. 31, 2013. A homeowner using an average of 5,000 gallons of water per month would pay roughly $26 more yearly. The increase is expected to generate an additional $800,000 yearly for the city.

• An increase to the electric utility tax imposed on residential and nonresidential consumers. The new tax rates, determined by kilowatt hours used in a month, are projected to raise an additional $1.03 million in revenue in 2010. A homeowner consuming 1,000 kilowatts of electricity per month would pay roughly $27 more yearly.

The council will review the tax and fee increases annually.

The city also will be eliminating between 38 and 41 positions next year as part of 2010 budget cuts, Moylan said.

The overall deficit next year is expected to be $1.4 million, primarily in the city's water and sewer fund where expenditures surpass revenues.

Finance Director Dorothy Wisniewski said the city will draw from the water and sewer reserve - $5.2 million at the beginning of 2010 - to make up for the deficit, leaving roughly $3.6 million in the fund at the end of next year.

She added, the city's general fund will actually have a surplus of $1.4 million instead of the earlier projected $3.6 million deficit.

The city council this week also adopted the 2009 property tax levy for a total of roughly $29 million. That's a .50 percent increase from the 2008 levy. The city will receive an estimated $39 million from other revenue sources in 2010.

A fund-by-fund breakdown of Des Plaines' 2009 property tax levy compared to the 2008 levy shows:

• General corporate: down 4.2 percent

• Police pension: up 20.5 percent

• Fire pension: up 39 percent

• Library: down 7.5 percent

• Debt service: down 7.6 percent

The total 2009 property tax levy represents a 0.5 percent increase over the 2008 property tax extension. The levy went down from a proposed increase of 1.36 percent largely due to the library reducing its budget from roughly $6.5 million to $6.3 million.

The city's total 2010 budget appropriation is roughly $101 million. That includes $54 million for general fund expenses, $13 million for water and sewer upgrades, roughly $10 million for employee health benefits, more than $7 million for capital projects, $6 million for tax increment financing districts, $3 million for risk management, $2 million for motor fuel tax funded road improvements, and $1.4 million for bond and interest payments.