By Ted Schnell • BocaJump | Nov. 22, 2011
When the Elgin City Council began formal budget deliberations Nov. 11, the administration presented three options for balancing the 2012 budget. They ranged in severity from no cuts but new taxes and fees; to some cuts and some new fees; to massive cuts.
Be prepared for another alternative to surface come Monday, Nov. 28, when the City Council sits down for its next look at the city’s 2012 budget and five-year spending plan.
Saturday afternoon, as workers stacked chairs that, just 20 minutes before had seated some of the estimated 200 people who had turned out for the “interactive public budget hearing” at The Centre, City Manager Sean Stegall listened as one resident praised the effort to plug the public into the budget process. As Councilwoman Anna Moeller joined the conversation, Stegall told the resident that the day’s comments from the public, along with feedback he’d received from the City Council, had convinced him to consider presenting the council with a fourth budget option, one that “rips the bandage off quickly.”
That’s an expression Mayor David Kaptain used Saturday morning, and one that he’s used before to describe the various approaches to resolving the city’s budget crisis: Peel off the bandage slowly to ease the “pain” by spreading it out over a period, or rip it off quickly to get the pain over with all at once.
The first approach would phase in over the course of several years the solutions to the city’s structural budget deficit, which at best totals $4.8 million but at worst could hit $13 million. Ripping the bandage off quickly, Kaptain has said, would entail the immediate implementation of new fees and taxes to diversify the city’s tax base.
Stegall said Saturday afternoon, while rushing off to a personal engagement, that he had an idea of what he wanted to do “in my head,” but that he would be working on it through week. In fact, because of the Thanksgiving holiday, Stegall said he likely would be working on the new budget right up to the City Council’s next budget meeting.
That meeting is scheduled from 5 to 9 p.m. Monday, Nov. 28, in the City Council Chambers in City Hall.
He did not respond Monday to an emailed request for a general description of the new budget proposal. But Saturday morning’s session included an array of suggestions from the public, some perhaps surprising. There certainly were calls for cuts, but some of those suggestions were refuted by other members of the public. There were expressions of support, however, for an $18 monthly refuse collection fee, and even some calls for the city to bring back the annual vehicle sticker fee that was eliminated after the Grand Victoria Casino opened in late 1994.
There also were calls for other taxes, such as increasing the home rule sales tax, adding a food and beverage tax, or increasing the gasoline tax. Any of those options would tap not only Elgin taxpayers, but also those who live elsewhere but pass through the city.
There also appeared to be resistance to the idea of increasing the city’s property taxes, which is the crux of at least one issue the city must consider. More than one City Council member expressed the idea of perhaps creating new taxes or fees with an eye toward dropping Elgin’s property tax levy at least a little.
Stegall and the City Council have referred to the city’s financial situation as the result of a structural budget deficit, which essentially means after four years of cuts, further cuts would jeopardize core services that cannot be maintained as they are without new sources of revenue.
The largest portion of city revenues comes from the property tax, which is just one of 11 revenue streams available to the city. But Elgin only taps four of those — property, hotel-motel tax, home rule sales tax and the telecommunications tax.
The recession has hit hard several of those revenue streams at once. Diversifying the types of taxes and fees the city collects would help minimize the impact of that in the future, city officials say.
