The Elgin City Council passed a $277.8 million budget, which includes a $2 million reduction in property taxes for 2013 in a 6-1 vote, with Councilman John Prigge opposing.
The proposed spending plan represents a 2.58 percent increase of the $270.8 million 2012 budget, which included new taxes on natural gas, electricity, alcoholic beverages and refuse collection. City Manager Sean Stegall said the new taxes amount to an average of a $58 increase per person in the city, but added that can vary greatly.
Colleen Lavery, the city's chief financial officer, said the city's goal of reducing reliance on property taxes has been accomplished. Property taxes provide 31 percent of tax revenue, down from 47 percent last year, she said.
Lavery said they are expecting general fund earnings of $102 million, with $95 million in expenditures. Some of those general fund expenditures will include hiring a new building inspector and $11 million for a public safety communications system and $2 million for new public safety vehicles.
About 75 percent of the general fund goes to employee compensation and benefits, which amounts to $73,360.180.
Prior to the vote Prigge said the budget is a statement of the city's priorities, but those priorities don't reflect the interests of the taxpayers. Prigge said the budget contains a number of unnecessary expenses, including $900,000 for the recreation center, and expenses supporting fireworks in other communities.
"We are continuing spending habits that do not reflect the new economy," Prigge said. "Diversifying the tax stream does not mean we should continue to pick the pockets of the people of Elgin."
Echoing Prigge's opinion was resident Terry Gavin who criticized the annual spending plan. He said the budget has grown 36 percent since the 2011 budget was passed, which for him indicates a desire to grow government rather than protect the interests of the taxpayers. He said city leaders should look at reducing spending rather than funding projects for programs that are not being used, like many of the recreation programs.
"The rec center is gushing red ink... I don't think the taxpayers are very happy," Gavin said.
Gavan said the city should repeal most of the new taxes it passed last year and rewrite a budget that includes less spending.
Councilman John Steffen said there are a number of one time expenses in the budget that are paid for by revenue streams that do not come from tax dollars, but from sources like grant funds and developer fees.
Councilwoman Tish Powell lauded the new revenue streams implemented in last year's budget.
"We can't lose sight of the long term goal to reduce reliance on property taxes which will benefit the whole community," she said. "We've reached our own fiscal cliff these past years ... and the actions we took helped us avoid going over that cliff."
On the same night they passed the budget, council unanimously passed a strategic plan. The plan includes seven goals with three objectives each. Stegall said he expects the plan to go into effect Jan. 1, 2013. The goals include utilizing technology and partnerships to provide a safe community, and encourage private investments, job creation and a sustainable tax base.
Officials also unanimously passed a property tax levy of $40,507,000, a reduction of $5.4 million, or 11.8 percent from last year.