Editorial: ‘Civic contribution’ an unseemly skim
A tenth of a penny doesn’t sound like much — especially when it can be translated into thousands of dollars for government. But when it comes to the faith between citizens and their local leaders, that small amount can be a very big deal.
Case in point: So-called “civic contributions” permitted in the legislation that enables communities to aggregate into partnerships and thereby offer their citizens substantial rate reductions. The civic contributions allow electricity companies bidding for contracts to differentiate themselves with a little sweetener that consumers may barely notice but that governments can put to some use.
By another name, they could be called kickbacks. Some leaders in the 60 or more suburban communities that rejected the contributions call them “hidden taxes.” By whatever name, the civic contributions transfer to government bodies a portion of electricity savings that consumers could see, and that is a most unseemly precedent.
It’s certainly easy to recognize the temptations of the civic contribution. As the Daily Herald’s Tara Garcia Mathewson reported this week, West Dundee, one of seven towns in the region to accept civic contributions, took a $200,000 hit to the budget when its Best Buy store folded. The $20,000 it expects to earn from the civic contribution doesn’t replace that, of course, but it could help.
And Hoffman Estates could collect as much as $120,000, even though the contribution it approved is only one one-hundredth of a penny per kilowatt hour. Considering that an individual utility customer would barely notice the effect of that 1/100th of a percent skim, or even the 1/10th of a percent skim taken in most such deals, we’re not talking about significant change.
Still, however insignificant the amount, that change is still the consumer’s. Electrical aggregation was introduced as a means of providing rate relief for utility customers, not as an opportunity for a slight economic windfall for local governments.
Many of the towns that adopted contracts with civic contributions, such as Hoffman Estates and Island Lake, set the money aside for projects outside ordinary expenses or specifically identified where they will spend it. But many others appear to be folding it into the general fund. This just adds to the impression that agencies are taking advantage of an opportunity to slip into their own coffers a few bucks that were intended for others.
If a community needs to collect more revenue — and we certainly recognize that many do in these difficult times — there are established procedures for seeking them that involve the full awareness and consent of the people providing the money. That’s the way that the most open and considerate agencies operate, And, tough times or no, it’s really the best way for all governments and schools to deal with — or more to the point not deal with — so-called “civic contributions.”