By Ted Schnell • BocaJump | Nov. 29, 2011
Here are key points of the latest budget proposal City Manager Sean Stegall presented Monday night to the Elgin City Council:
Property tax relief
- An immediate $1 million cut in the city’s portion of the property tax bill in 2012. The cut would increase to $10 million by 2014, representing a total reduction of 25 percent in the city’s share of property taxes.
- An electricity tax based on kilowatt hours used. City officials said 70 percent of the revenues from this tax would come from Elgin’s largest electrical users — commercial properties, while 30 percent would come from residential users. The city estimates the average homeowner would see about a $33.53 annual increase in electrical costs because of the tax. Implementation in July 2012.*
- A tax on natural gas use of 5 percent of gross receipts and 3 cents per therm used at an average cost per resident of $29.48 a year. City officials estimate 50 percent of Elgin’s natural gas users are commercial and 50 percent are residential. Implementation in July 2012.
- A storm water utility tax in 2014 or 2015 to begin generating revenue for ongoing efforts to separate the city’s combined storm sewer system.
Eliminating structural deficit
- $13.30-a-month fee for trash hauling. City officials estimate the fee will increase 3 percent a year because of negotiated rates.
- A 3 percent alcoholic beverage tax is expected to generate $500,000 in 2012 and $1 million a year afterward. City officials described this as a tax over which people have control — they can choose to drink more or less. It is also a tax, they say, that will be paid for by both residents and nonresidents. In conjunction with this, Stegall said, the administration is recommending a 56 percent reduction in liquor license fees. Reduction of the liquor license fees would be decided before implementation of the tax in July 2012.
Other parts of plan
- $2 million annual transfer of riverboat revenues to the general fund would end by 2016.
- A $100,000 bump from the “balanced approach” budget, to $250,000 in social services funding in Version 2, as well as $50,000 for the arts. The money comes from savings the city expects as a result of the Downtown Neighborhood Association’s to pursue its funding through the downtown tax increment financing district instead of via a purchase of services agreement with the city.
* A proposal being considered in Kane County would place on the ballot a referendum seeking electrical aggregation — allowing communities such as the city of Elgin to seek cheaper suppliers of electricity. If that referendum passes, Elgin Corporation Counsel Bill Cogley said, Kane County estimates communities would see a 20 percent reduction in rates on the electrical supply portion of their electrical bill. That would more than offset the cost of the tax increases on both electricity and natural gas for Elgin residents, who would see a net savings of $17 if the aggregation referendum and both utility taxes pass.