Latest Elgin budget adds several new taxes
Elgin City Manager Sean Stegall presented council members with a new draft of the budget proposal Monday night in one of the final discussion-based meetings the group will have before approving the financial plan.
The latest recommendation is marked by a variety of new taxes, two of which will be used to close a budget gap with the rest planned to offset proposed reductions in property tax revenue.
A refuse fee will remain from Stegall's first budget recommendation -- but it will be just $13.30 per month to cover the costs of the program -- and an electricity tax, natural gas tax, alcoholic beverage tax and, in 2014, a stormwater utility fee will be added.
"We are not looking for any additional revenue; we're just coming at it a different way," Stegall said.
The council has expressed concern over the city's reliance on property taxes as a proportion of the total revenue. Stegall's latest proposal, instead of holding the property tax levy steady -- thereby increasing the tax rate on residents -- would reduce the levy by $1 million in 2012 and reduce it by $10 million by 2014.
The electricity tax, natural gas tax and stormwater utility fee are designed to make up for the difference.
Corporation Counsel Bill Cogley told council members the average homeowner, each year, would pay about $29 for the gas tax and $33 for the electric tax. The stormwater utility fee would still need to be researched for estimates.
The alcoholic beverage tax, set at 3 percent of sales, is expected to generate $1 million for the city starting in 2013 and go directly to solve the structural budget deficit.
"We chose this over the food and beverage tax because we felt this was the purest way for people to be able to make a choice on whether they wanted to pay the tax or not," Stegall said.
In acknowledging the new tax would cause a greater paperwork burden on businesses, Stegall recommended cutting the liquor license fee in half if the council decides to implement this tax.
Changes to the Riverboat Fund in the latest proposal include increasing human service funding to $250,000 and cultural arts funding to $120,000 so more grant money can be awarded to Elgin agencies in exchange for service agreement cuts.
A proposed $2 million transfer from the Riverboat Fund to the General Fund was revised to be effective for four years instead of indefinite. Stegall called the change a compromise for those who wish to break away from the current Riverboat Fund policy, which limits use of the funds to one-time expenses, and those who wish to keep it.
Council members will discuss the budget again starting at 6 p.m. Wednesday in preparation for a Dec. 7 Truth in Taxation hearing and Dec. 21 budget adoption.