Wheaton approves utility tax increase

Local taxes on electricity and natural gas will increase in Wheaton, with the city approving higher rates to address a budget shortfall next year.

The city council Monday narrowly approved boosting the utility taxes to help combat a projected $1.5 million deficit in the city's 2010-11 budget.

The changes take effect with bills issued on or after May 1. Wheaton's electricity tax will climb from 4 to 5 percent. The city's 2-cent-per-therm tax on natural gas will increase to 3 cents.

City officials said the increases will cost the "average" Wheaton household about $37 more a year. They said they could not estimate what the average household is now paying for natural gas and electricity.

The utility tax increase expected to generate nearly $900,000 in additional revenue for the city, which eliminated 17 positions in January to save about $1.16 million.

Still, city council members were divided 4-3 during both votes on the two taxes. Council members John Prendiville, Howard Levine and Liz Corry opposed the increase. Voting for it were Mayor Michael Gresk, Phil Suess, Todd Scalzo and Tom Mouhelis.

Prendiville said he voted "no" because the utility tax has a greater impact on those who can least afford to pay it. He also expressed concern that other taxing bodies, including the county government, which is based in Wheaton, will pass on the cost of their higher utility bills to residents.

"It (the utility tax) increases the pressure on not-for-profit organizations, of which we have many in the city of Wheaton, including many social service providers who are under the gun right now because of the problems we have at the state level," Prendiville said.

However, Scalzo said the tax is fair because everyone in town - including owners of tax exempt properties - has to pay it.

"This is the least worst tax," Scalzo said. "It's not that it's a good tax. No taxes are good. But what it (the utility tax) does is it asks all properties in the community to share the burden."

Suess said Wheaton must have diversified sources of revenue independent of the state, especially now that Gov. Pat Quinn is proposing to reduce municipalities' share of the state income tax.

If Quinn's plan to cut municipalities' share of state income tax from 10 percent to 7 percent is approved, Wheaton officials estimate the city would lose roughly $1.3 million a year.

"The fluctuation in the utility tax revenue is significantly less in comparison to what we're seeing with the state income tax," Suess said.