Daily Archives: February 27, 2009

Museum Block, Peoria Civic Center, Peoria County, Taxes

Ritschel not seeing all the benefits of higher taxes

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Here’s an intriguing story from the Journal Star. It’s in regard to a request from City staff to raise sales taxes downtown to help repay general obligation bonds that will be used to build a new Mariott hotel:

Civic Center officials believe an extra 1 percent sales tax on concessions and catering could put the Downtown sports and recreations center at a competitive disadvantage compared to other nearby facilities . . . .

Ritschel said the 1 percent tax would generate approximately $30,000 a year for the Civic Center, which is less money than they anticipate losing to East Peoria and elsewhere because of the extra tax.

Peoria and East Peoria tax similarly when it comes to hotels, food and beverage sales, Ritschel said, so the extra 1 percent would make the Civic Center “more uncompetitive.”

Perhaps someone from the museum group can explain to Ms. Ritschel and the rest of the Civic Center officials the big benefits of higher sales taxes. They spur economic growth; they don’t hurt it. The new Marriott downtown will bring jobs and be like our own little stimulus package. And besides, it’s so cheap — only $1 for every $100 spent. How much does the average person spend on concessions downtown? $25? It’s only going to add an extra quarter to your purchase! Pocket change, dude. They must just be naysayers who don’t want to see progress in Peoria.

Obviously, I’m poking fun at the arguments given for the museum sales tax. But all sarcasm aside, I actually agree with Ritschel on this issue. The same thing that Ritschel fears will happen with a 1% sales tax increase will also happen if voters approve a .25% sales tax increase in Peoria County to pay for the proposed downtown museum. It will make us less competitive and drive more business across the river and elsewhere. Did you catch the phrase she used? She said a tax increase would make the Civic Center “more uncompetitive.” In other words, there’s already a tax disparity, and adding to it is just going to exacerbate the problem.

Did the Bradley professors take the cross-border effect of tax disparity into account when they did their economic analysis of the museum project? I’ve added that to my list of questions to ask when we meet. I expect a call soon to set up a meeting date/time.

Peoria County, State of Illinois

Did Peoria County break ethics law by conducting survey?

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Recently, Peoria County did a web-based survey regarding the proposed downtown museum with this explanation:

Your Peoria County Government is interested in your opinion regarding public funding of the Peoria Riverfront Museum. Museum partners have requested public funding to complete the project, so the County Board must decide whether to proceed with a referendum to increase the sales tax rate one quarter of one percent. Your participation in this brief survey will help with that decision.

And as part of its “National Citizen Survey” in 2008, it asked this question:

The Peoria Riverfront Museum project – with a focus on education, history, arts, and sciences – has fallen short of its public and private fundraising goals. To what degree would you support or oppose a voter referendum to increase the sales tax rate by .25 percent (for example, from 8.0% to 8.25% for the City of Peoria) to fund the remaining cost of constructing money?

The question is, can the county do this — legally? The municipal code (as required by state law under 5 ILCS 430) appears to prohibit this kind of political activity. Sec. 2-29(b)(1) and (2) states, “No officer or employee shall intentionally perform any prohibited political activity during any compensated time, as defined herein.” There’s a whole list of what is considered “prohibited political activity,” but here’s the one about surveys from Sec. 2-29(a) [emphasis mine]:

Prohibited political activity means [. . .] (5) Surveying or gathering information from potential or actual voters in an election to determine probable vote outcome in connection with a campaign for elective office or on behalf of a political organization for political purposes or for or against any referendum question.

Isn’t this precisely what the county has done? The web survey and the National Citizen Survey question are clear attempts to determine the probable vote outcome of a sales tax referendum for the museum. They were both done at county expense, on county time, by county employees. What service does this provide citizens of the county? None that I can see. The only thing it appears to provide is taxpayer-funded market research for the museum group.

Peoria Public Schools, Public Building Commission

District 150 finances in question

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Several days ago, I mentioned that audit reports the last several years for District 150 have been warning about inadequate internal controls. Things are no different this year, the Journal Star reports.

The internal financial review controls at District 150 are at the very least inadequate, resulting in errors, unsubstantiated account balances and generally leaves the district without an accurate day-to-day report of its cash flow, according to a letter from the district’s auditors.

I had also wondered how Cahill could keep his job with such terrible audit reports year after year. Apparently Cahill wondered that himself, according to an e-mail he wrote that the Journal Star acquired through a Freedom of Information Act request:

Cahill said he believed the [audit] letter, received from District 150 this week through a Freedom of Information Act request, would be used in calling for his termination, according to an e-mail from his District 150 account to a Chicago attorney, received through a separate FOIA request.

“The attached will be used by several board members who, I suspect, will call for my firing,” the Feb. 5 e-mail states. “What the management letter does not disclose is that most if not all the items reported have been the norm in the district for more than 14 years, according to auditors (Ron Hilton, Dennis Baily, and Helen Barrick), and cover the terms of at least three controller-treasurers.”

Interesting defense. He’s basically saying that internal controls have always been inadequate, so he shouldn’t be held responsible for their continuing to be inadequate. Not very convincing.

But here’s what really slays me. The headline for this story is “District 150’s books a mess.” But another report filed just hours before this one has the headline: “District 150: Finances in order.” This latter story is about District 150’s meeting with the Public Building Commission to assure them that the district’s finances are not a problem.

Nine District 150 representatives filled a small meeting room before the Public Building Commission of Peoria on Thursday, reassuring its members that the school district is on the right financial path.

“I want to reassure this particular body that the Board of Education immediately began taking action in January to adjust expenditures to meet those predicted revenue shortfalls,” Superintendent Ken Hinton told PBC members. “This board, this administration is completely dedicated in seeing that our school district is solvent.”

Not that this was at all necessary. PBC members appear unconcerned with District 150’s budget woes.

When asked whether the PBC has any concerns about the district’s financial solvency and the district’s ability to repay the bonds, Goldstein and Thornton said “no.” Both men also noted the commission had no concerns about Cahill’s departure.

Really? No concerns at all? The district “has projected it will have a $4.3 million deficit and possible $9 million-plus revenue shortfall next year,” and they fired their controller/treasurer, and their audit reports have been deplorable, but the PBC has no concerns? I guess if you’re an unelected body, unaccountable to the voters, you can afford to take such a cavalier attitude with property tax money.