Elgin approves 2018 budget with higher sales, hotel taxes

  • The Elgin City Council approved the 2018 budget Wednesday night.

    The Elgin City Council approved the 2018 budget Wednesday night. Elena Ferrarin | Staff Photographer

 
 
Updated 12/20/2017 9:18 PM

The Elgin City Council unanimously approved the city's $259 million budget for 2018 and three-year financial plan, which calls for a mix of spending cuts and revenue increases aimed at both residents and nonresidents.

"There's no new programs," Councilman John Steffen said. "This is trying to maintain the quality that we have had so far, and people seem to like, in the city."

 

That includes $1 million in cuts, mostly to firefighters' overtime costs; $1 million in additional revenue from ambulance fees charged to nonresidents, and $4.2 million in additional revenues from a new gasoline tax; and increases to sales and hotel/motel taxes.

Key provisions are:

• A flat general fund property tax levy of $27.8 million.

• Increases to the property tax levies for police and fire pensions of 2 percent and 6 percent, respectively. That, combined with a levy increase for bond payments, would equate to an additional $29 on the average property tax bill.

• A $3 monthly increase to water and sewer rates, with a total 42 percent increase projected by 2022.

• A 3 percent increase to refuse/recycling fees each year through 2020, as per the city's contract with Waste Management.

• A new 4-cents-per gallon local gasoline tax effective July 1.

• A 0.25-percentage-point boost to the local sales tax, also effective July 1. The total sales tax in Elgin's Kane County portion will be 8.5 percent, and the total sales tax in Elgin's Cook County portion will be 10.5 percent.

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• A 4-percentage-point increase to the hotel/motel tax, which will total 8 percent, effective Jan. 1. That will add $2.78 to the cost of an average room.

The city will use $876,000 from reserves to balance the $116.6 million general fund, which pays for day-to-day expenses. The plan is to use $6.7 million in reserves through 2020 to balance the general fund.

Elgin Association of Firefighters Local 439 lobbied against the overtime cut, which union President Joe Galli said would affect the safety of residents and firefighters.

"I flat out disagree with that," Councilman Toby Shaw said, adding the utilization of fire equipment "is terribly low." The city must take a hard look at the rising costs of public safety or "we'll be bankrupt," Shaw said.

                                                                                                                                                                                                                       
 

The budget includes a 2.5 percent salary increase for all employees, union and nonunion.

Council members also terminated an agreement with the Elgin Area Convention and Visitors Bureau that had been giving the agency 43.75 percent of the city's hotel/motel taxes since 1991. Last year, that amounted to $212,500.

The council will discuss a new contract for services with the bureau, likely setting a specific funding amount, sometime in late January or early February.

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