It’s Tuesday night again, so time for the City Council Meeting. Here we go (agenda linked to background documents available by clicking here):
Category Archives: City of Peoria
City Attorney says nothing more can be done to protect against erroneous sales tax collection
Back in July, I reported on some overtaxing that was taking place in Peoria. I discovered first-hand that when businesses erroneously charge too much sales tax, the citizen who is overcharged pretty much has to fend for himself to get reimbursed.
A communication from the city’s legal department to the city council more or less confirms that state of affairs. Councilman Gary Sandberg had requested that the city draft an ordinance that would impose penalties on businesses that collected more sales tax than they are statutorily authorized to collect. The memo to the council is in response to Sandberg’s request.
In a nutshell, the memo states that sales tax collection is handled at the state level — the city has no power to enforce collection or impose penalties for collecting the wrong amount (whether too little or too much). A plain reading of state statutes confirms this, unfortunately. However, City Legal then goes on to state:
A review of the State sales tax statutes, however, reveals that, in fact. there is a specific provision, 35 ILCS 120/2-40, which provides that purchasers are entitled to refunds from retailers who erroneously collect Retailers’ Occupation Tax and further provides that any erroneously collected tax not refunded must be forwarded to the Illinois Department of Revenue. 35 ILCS 120/2-13 provides for civil and criminal penalties for those who file fraudulent returns, who collect Retailers’ Occupation Tax and do not forward it to the Illinois Department of Revenue and who do not properly collect the tax. In short, the State sales tax statutes cover the field for civil and criminal penalties for sales tax violations.
The thrust of this and subsequent paragraphs, as I see it, is to assure the council that citizens are adequately protected by state law, and thus a local statute would not be needed even if it were permitted (which it’s not). But I would argue that it’s not adequate. Yes, 35 ILCS 120/2-40 does provide that, if the seller collects too much sales tax, “the purchaser shall have a legal right to claim a refund of that amount from the seller.” But this puts the onus on the purchaser to prove to the seller that they collected the wrong amount in the first place.
That might be easy if dealing with a local merchant (of course, a local merchant probably wouldn’t make that mistake in the first place), but when dealing with an out-of-town company, the local manager will generally give you a blank look and say, “the sales taxes are put in the computer by our corporate office.” So then you have to try to contact the corporate office, and the red tape only gets worse from there. Bottom line: it’s not worth your time to fight it unless you’ve purchased a big-ticket item and the difference in tax is significant.
Furthermore, the civil and criminal penalties listed under 35 ILCS 120/13 (not 35 ILCS 120/2-13, which doesn’t exist) only covers deliberately fraudulent acts and the failure to remit to the state all sales tax money collected. It doesn’t cover a situation like the one that happened in Peoria in July. We already knew that because I called the state and was basically told that as long as the business is remitting the money, the state isn’t going to do anything to correct the problem. It falls on the citizen to call the business and somehow convince them that they’re charging the wrong tax rate.
And that’s where this system falls apart. When you, Joe Citizen, complains that a business is charging the wrong tax rate, you are the one who has to prove it. From personal experience this year, I can tell you that the seller is going to defend the tax rate the store is charging. They get official documents from the home office in Chicago or Minnesota or wherever that says the tax rate is X, and by golly, the tax rate is X. Why should they listen to you? You’re probably just uninformed or a general complainer about how high taxes are.
There has to be a way for official notification to be sent to places that are charging the wrong tax rate. The city did do that this past month in order to clear up confusion with a number of businesses. But there is no policy in place that would require the city to do that. I would argue that they only did it because of the media spotlight that was put on the issue, because they certainly didn’t offer to do that for me when I complained, before the story got picked up by the local mainstream media.
If nothing else can be done (and that appears to be the case), the city should at least establish a procedure wherein citizens can notify the city of erroneous tax charges, and the city will notify the company of the correct rate. Someone needs to go to bat for the citizens of Peoria. Why shouldn’t it be the City?
Peoria passed up for another grant
This isn’t Peoria’s year for winning grant awards. After losing out to Morton for some IDOT money, Peoria got more bad news — this time from the Illinois Department of Human Services (IDHS). A recent Issues Update reports:
In April 2009, the City submitted a funding application for $9.3 million in NSP funds to the Illinois Department of Human Services. The NSP funds were granted to the State as part of the early federal “stimulus” efforts, and the State decided to pass the funds through to local governments and agencies.
The City received notice on September 2, that our application was not selected for funding. We will follow up with the State to determine the deficiencies with the application.
These funds would have been used for down payment assistance for 33 new home buyers, the purchase-rehabilitation-sale of 5 existing housing units, the demolition of 71 deteriorated housing units, and the construction of 47 new housing units in older neighborhoods.
According to the IDHS, “The Neighborhood Stabilization Program (NSP) provides grants to purchase foreclosed or abandoned homes and to rehabilitate, resell, or redevelop these homes in order to stabilize neighborhoods and stem the decline of house values of neighboring homes.” The program awards are listed on the IDHS website. Whereas Peoria requested a $9.3 million grant, the largest grant awarded was $4.833 million to 55th & State Redevelopment, LLC, in Chicago. Other recipients included the cities of Champaign ($1.395M), Rock Island ($3.133M), Quincy ($1.9M), and East St. Louis ($2.5M).
Where’s the outrage?
We’re all enjoying the calm before the storm. We’ve heard the warnings — the city council is going to have to make some deep cuts in order to close the $10-12 million budget gap. They’re trying to plug the gap without raising taxes. That means the cuts will have to be made “with a chainsaw, not a scalpel,” and will be “bloody,” to quote the mayor and another council member.
Yet, at the same time, the council had absolutely no trouble raising taxes to collect $40 million for a private developer. Think about that — they raised the sales tax (granted, for an area restricted to downtown — the so-called “Hospitality Improvement Zone”). They will collect money from that sales tax, and they will hand it over to Gary Matthews, a private citizen and developer, so he can build a huge hotel addition to the Pere Marquette. Matthews will, in turn, give the lion’s share of that money to Al Zuccarini for the properties he owns on the block shared by the Pere.
So, at the same time that the council is talking about cutting police officers, eliminating raises for employees, cutting back on code enforcement and road maintenance, and other draconian cuts in public services, they’re giving $40 million to Gary Matthews for a private development. At the same time the council is unwilling to even consider raising taxes for public services, they had no problem raising taxes to benefit a private development. In fact, they approved that deal with nary any discussion and absolutely no public input!
The council wants concessions from everyone — except in the area of developer welfare. The one area that primarily benefits only a handful of people gets a free pass, while those areas that affect everyone in the city get the axe.
And my question is: Where’s the outrage? Do Peorians really not care? Do they think this is good public policy? Do they really think that we’re spending too much on public services and not enough on developer favors? Or are they uninformed? Do they not know this is happening? Or have they given up? Have they become jaded and numb to fiscal irresponsibility coming out of City Hall?
If this hotel deal were a good business decision, the developer would have already gotten his private financing lined up and started construction. But he hasn’t. He can’t get private financing. And you know what that means? I guarantee you it means this: He’ll be back to the city asking for more money in one form or another. Count on it.
Maybe that will be enough to wake up Peorians and cajole them into expressing outrage to their city council members. Then again, maybe not.
Caterpillar opposes changes to Washington Street
Caterpillar, Inc., sent the following letter to all City Council members on August 20, 2009:
To the City of Peoria,
While Caterpillar has long supported downtown revitalization efforts, the latest feasibility study for reworking the Washington Street (U. S. Route 24) corridor causes significant concern for pedestrian safety.
Caterpillar believes the U. S. Route 24 Adams Street / Washington Street Feasibility Study, released in draft form on May 15, 2009, fails to adequately address:
- The safety of pedestrians (including Caterpillar employees in multiple buildings) in the entire downtown area,
- The enhancement of safe and efficient traffic flow–especially truck traffic–on Washington, Adams, and Jefferson Streets, and on other routes connected to Washington Street,
- The impact of this proposed plan on the downtown environment.
Caterpillar has publicly submitted its concerns and questions regarding the feasibility study to David Barber, Director of Public Works, according to procedures given by the City and the Illinois Department of Transportation.
Caterpillar believes these questions and concerns must be part of an Illinois Department of Transportation Phase I Study.
If the project is not expected to proceed to a Phase I Study, Caterpillar will seek a discussion of the matter with the City of Peoria and the Illinois Department of Transportation.
Thank you.
Tim Elder, Director, Corporate Public Affairs
William Ball, Social Responsibility Manager, Corporate Public Affairs
Raymond Perisin, PE, Sr. Engineering Project Team Leader, Global Facilities Planning
Several thoughts on this. First of all, I’m at a loss as to how Caterpillar can possibly be concerned about pedestrian safety in the proposed plan. The plan would narrow Washington street by widening and improving sidewalks and adding street trees, slowing traffic and reducing the crossing distance for pedestrians. There’s no way that could be considered less safe than the current situation.
Secondly, Caterpillar employees are not affected by Washington or Hamilton street traffic because they have skywalks over these roads already. They can completely avoid crossing at the street level.
Thirdly, slower speeds would make traffic flow safer. Whether it will make it more “efficient” depends on one’s definition of the term. If “efficient” means “fast,” then technically, it will be no less efficient than it is currently. I asked the IDOT representative if they were planning to lower the speed limit on Washington, and they said they were not. The improvements to Washington will only slow traffic that is currently exceeding the speed limit — especially trucks.
Finally, I’m not sure what to make of the last two paragraphs, except that the language sounds a bit bullying to me. It sounds to me like they are demanding their concerns be addressed to the exclusion of other businesses and property owners along the corridor. Caterpillar appears to be throwing their weight around to get their own way on a project that should be benefiting the whole city, not just one company.
David Kennedy methods rolled out in Peoria
The Journal Star reports that the Peoria Police Department, in cooperation with the State’s Attorney’s office, is rolling out a Drug Market Initiative/Intervention strategy here in Peoria. Although he’s not named in the article, this is the program developed by David Kennedy on which I reported back in March, with a follow-up article in April. In March, Chief Settingsgaard said that he had “a team being trained by Kennedy and his staff.”
The paper summarizes the program thus:
The Drug Market Initiative/Intervention strategy targets geographic drug markets and involves prosecuting the most violent offenders. Low-level offenders are offered a second chance through interventions and help from social service agencies, along with the warning that another crime means jail time.
I applaud the police for trying new methods to reduce crime, and I’m especially pleased to see the police working with the State’s Attorney’s office. Too often there is an adversarial relationship between these two agencies. Best of luck to everyone involved in implementing this new strategy.
Liveblogging the City Council 8/25/2009
As usual, I’ll be updating this post throughout the evening, so be sure to refresh if you’re following this live. Here’s tonight’s agenda for the Peoria City Council Meeting:
News Summary 8/24/2009
Good morning! It’s Monday, August 24, and this week District 150 school kids go back to class. Mothers all over Peoria are rejoicing. In other news:
- School Board member Rachael Parker is planning a run for Bud Sous’s Peoria County Board seat. The election is in 2010, and if elected, Parker would have to give up her seat on the School Board.
- The City of Peoria is going to intervene in the Illinois American Water rate case, protesting the rise in water rates. According to a recent Issues Update from the city, the cost to intervene and monitor the process is “minimal,” but “to hire an ICC Utility Attorney and present expert testimony, that would likely cost $60,000 to $80,000.” So the city is going to look at mitigating that cost by possibly partnering with other nearby cities, like Pekin and Champaign. “Certain issues may be different but other issues, such as return on investors’ equity, would be common to all.” Illinois American Water is asking state regulators to let them raise water rates by more than 28% in Peoria.
- In a previous post, I mentioned that someone was polling residents with questions about the city and school district. Renee Charles of the Heartland Partnership said the company is aware of the poll, but after calling their subsidiary organizations (including the Chamber of Commerce), she went on record saying she does not know who is conducting the poll. The city and school district have also denied running the poll. So the identity of the pollster remains a mystery.
- A press release last week announced, “Senate Bill 1512, sponsored by State Senator David Koehler (D-Peoria), authorizes the Secretary of State’s office to issue false identification to undercover law enforcement agents.” But the most interesting part of the release was this statement (emphasis mine): “For years the Secretary of State’s office issued false identification to the police with no real authorization or clear guidelines. The new law ensures that these fake IDs are properly distributed and used only for undercover investigations.” I wonder what else is being done with “no real authorization.”
- At a press conference today, Democrat Carl Ray will kick-off his campaign to run against Congressman Aaron Schock for the 18th Congressional District of Illinois. There are two locations and times for his announcement: 10 a.m. at Five Points Washington (360 N. Wilmor Rd., Washington), and 2 p.m. at the Springfield Public Library (Carnegie Room South, 326 S. 7th St., Springfield). “There will be a 10-15 minute address, followed by time with the media and supporters.”
- The proposed downtown museum still has a “several million dollar gap” in funding, and they’re still negotiating a contract with IMAX.
- Invitations went out last week for the groundbreaking ceremony for the new Peoria Public Library North Branch. The event will be held September 10, 2009, 10:00 to 11:00 a.m. on Grand Parkway in Medina Plains Corporate Park off Townline Road.
IDOT passes over Peoria, puts a quarter million in Morton’s coffers
You be the judge. Which sidewalk and curb do you think is in worse shape? (Both images are courtesy of Google Maps.)
Is it number 1:
Grundy Elementary School, Morton, Ill.
Or is it number 2:
Trewyn Middle School, Peoria, Ill.
If you picked number 1, then you probably work for the Illinois Department of Transportation (IDOT). That’s the one they picked, too. They decided the sidewalks and curbs at Grundy Elementary were crumbling and in disrepair, and allocated part of a $253,460 grant to help repair them. For Trewyn Middle School in Peoria? Zip. Zero. Nada. Not a penny of grant money for that fine piece of well-maintained urban fabric.
Here’s the bad news from a recent Issues Update released by the City of Peoria:
The City received notice that it was unsuccessful in its grant application request for a Safe Routes Grant from the Illinois Department of Transportation…. The Infrastructure portion of the grant application included $235,000 for sidewalks and curbs around Trewyn Middle School and Rolling Acres Edison Junior Academy…. Communities in the area that were successful in their grant applications include Morton, which received $253,460.
Yes, Morton — because we all know how run down and short of funds Morton is. According to the Journal Star, they wanted the money to pay for “replacement of crumbling sidewalks, curbs and gutters, installation of new sidewalks, and new crosswalks in an area that includes Grundy Elementary School, Blessed Sacrament School and Bethel Lutheran School.”
Apparently the grant award process didn’t include a physical site inspection.
Scroggins: Deficit could be $12 million
At the policy session Tuesday night, Finance Director Jim Scroggins was speaking and casually said something about a “$10 to $12 million deficit.” Councilman Sandberg stopped him mid-sentence after that and said, “Did you say $12 million?” Scroggins: “Ten to twelve.”
Can I just state the obvious here? The difference between ten and twelve million dollars is not trivial. Two million dollars can pay for a lot of city services. The council has been proceeding on the assumption that the deficit is going to be $10 million, and there’s already rhetoric that budget cuts are going to have to be made “with a chainsaw, not a scalpel” and it’s going to be “bloody.” I shudder to think how much worse it will be if the deficit grows another twenty percent.
One thing we can be sure of, though, is that the city will continue to protect unnecessary and expensive developer welfare like the $39.5 million they’re planning to give Gary Matthews to build a huge addition onto the Pere Marquette and affiliate with Marriott Hotels. They’re going to continue to protect money-losing “quality-of-life” amenities like the Civic Center and the proposed downtown museum, neither of which have been asked to sacrifice a penny. And they’re going to continue to annex more land to the north and west even though four decades of annexation has never produced the gravy train of revenue that was promised.
Instead, they’ll cut basic services, like police protection, code enforcement, animal and litter control, road maintenance, and the like. In tough economic times, it’s important to have priorities, you know.