Carl Missele says cuts, taxes and fees appear inevitable
By Ted Schnell • BocaJump | Oct. 20
The revelation that Elgin’s structural budget deficit in 2012 could hit $13 million throws a huge wrench into the budget-cutting efforts city officials had hoped would be eased with the work of the Elgin Budget Advisory Task Force.
Led by Carl Missele, the task force met over the course of two months to gather the views of residents and to formulate potential cuts and service priorities to recommend to the City Council. While City Manager Sean Stegall and Mayor David Kaptain both commended the task force for its efforts, Missele wondered late Wednesday just how helpful its recommendations will prove given the increased magnitude of the deficit. When the task force was meeting, he said, it was anticipating a deficit of $4.5 million, a figure that since has doubled or even tripled.
“The City Council has one heck of a job on their hands,” he said, adding that he is grateful the budget task force’s work is done. “There is going to have to be a lot of cutting — there’s no doubt about it.”
Cuts in services, he continued, appear at this point to be a near certainty.
Look at overtime, payroll
At this juncture, Missele said, he would recommend the city administration and council take a hard look at the city’s overtime costs as one area for cuts. He described those costs as significant, accounting for about 10 percent of the city’s payroll. Missele said the level of overtime is a luxury the city cannot afford given the weakening revenue forecast.
He noted that while some groups advocate cutting services, doing so is divisive, because everyone has differing views of what is essential and what is not. That is further complicated, he continued, because personnel come into play — salaries and benefits amount to 75 percent of the city’s budget, which is typical for a municipality.
So, as the task force recommended, Missele said the City Council should look at salaries and benefits as another area for potential cuts.
Revenue options: taxes and fees
Missele also noted that the task force had recommended the City Council consider new fees, new taxes or tax increases only as a last resort after exhausting all other possible cuts. Based on the latest deficit projections, Missele said it would appear that adding new revenue, whether by taxation or fees, is inevitable.
There are options available, he said, pointing to a comparative survey the task force reviewed of revenue sources that are available to the city. Some already are being used — property taxes and Elgin’s telecommunications tax, for example. But many cities and towns in the area are taking advantage of revenue sources that Elgin has avoided, or in at least once instance — the controversial real estate transfer — has abandoned.
Any or all could be on the table for council consideration.
Elgin’s property tax rate has stood at or below $1.92 for nearly two decades, a point some budget task force members said could provide the city with some flexibility. While the proposal was not endorsed by the task force, some members advocated the city allow the rate to float upward or downward with property values to ensure that property owners pay the same level to the city every year. Doing so, they reasoned, would assure the city of some stability — at least in terms of property tax revenues.
But there are other options as well. The city collects no food and beverage tax, nor does it collect a tax on natural gas, electricity or gasoline.
Among fees, Elgin abandoned its vehicle sticker fee long ago. Further, the city does not collect a fee from residents for refuse disposal, which is done by nearly every town in the immediate area.
Cuts the task force suggested
On Sept. 27, the Elgin Budget Advisory Task Force sent the council a list of suggested cuts totaling a little more than $2.4 million. Some of the larger expenses in that list included:
- $442,640 by delaying development of a regional park in the city’s Far West area
- $400,000 by cutting the Elgin Area Chamber of Commerce’s agreement for economic development efforts;
- $366,100 by eliminating the leaf rake-out program;
- $70,000 by ending the city’s subsidy for refuse stickers, which would increase in price from the $2 charged now to $2.35;
- $174,700 in savings by ending sponsorship of main stage entertainment at Hemmens Cultural Center, essentially relegating it to use as a rental facility;
- $125,000 by cutting resources to “Season” at the Hemmens;
- $171,800 in savings by outsourcing labor for building custodial work;
- $160,000 by eliminating or reducing the city’s contract for mowing;
- $100,000 by reducing snow removal service.
