Category Archives: Taxes

Peoria County, Taxes

What do you think of your property assessment?

39 Comments

According to Peoria County, the value of my house has gone up. But I have friends, relatives, and neighbors whose home values have gone down. According to Supervisor of Assessments Dave Ryan, the County is expecting the equalized assessed value of all property in the County to go down by 1.5%. He doesn’t have a firm figure because there will be many people who will contest their valuations in the next few months, and that will affect the final percentage.

Some people I’ve talked to — even those who have seen their home values rise — feel that the process has been fair and reasonable. Others think it’s ridiculous to think anyone’s home value has gone up given the weak economy and the decline of the housing market starting in late 2006 nationally.

What do you think?

City Council, City of Peoria, Peoria Public Schools, Taxes

Don’t be fooled by empty rhetoric from City officials

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There’s an article in today’s Journal Star I just couldn’t let pass without comment.

City officials including Mayor Jim Ardis have … expressed some of their frustrations with other taxing bodies in Peoria — namely Peoria Public Schools District 150 — for increasing its property tax rate while the city avoids similar hikes despite increasing political pressure to do so.

Reporter John Sharp did a good job of covering what I’m about to say, but I just want to emphasize it: The City didn’t raise property taxes because it raised taxes on our natural gas bills. The mayor and city council members can crow all they want about how they didn’t raise our property taxes (and District 150 did), but the truth is that the City will be taking more money out of our pockets next year than District 150.

According to this report, “Under the projected rate next year [for District 150], the owner of a $100,000 home would expect to pay about $1,640, excluding any Homestead exemptions or increase in assessed valuation, an approximately $13 increase [emphasis added] above this year under the same determinations.” In contrast, the natural gas tax is “a 3.5 percent tax on gross receipts resulting in about $33 to $34 more [emphasis added] for the typical residential user each year.” So the average homeowner will only be paying $13 more next year to District 150, but $33 to $34 more to the City of Peoria, albeit by different means. The total dollar increases are also significantly different: the City’s natural gas tax raises $2.2 million in revenue, whereas District 150’s increase raises up to $900,000 in additional revenue.

Furthermore, guess who else gets to pay the natural gas tax? That’s right — District 150! So the council has raised taxes on the school district, and is now complaining that the school district is raising property taxes. To a certain extent, the City is really raising property taxes by proxy. District 150 doesn’t have the ability to tax natural gas, garbage, water, liquor, etc., like the City does. When their costs increase, they have to go to the property owners to get more revenue.

Keeping these facts in mind, consider these outrageous statements from City officials quoted in the article:

“It doesn’t seem like there has been a lot of consideration from the other taxing bodies to continue to (not) increase their portion (of the property tax).” [Mayor Ardis]

“We’re on the edges of a tax revolt in this country…. The bottom line is we have to live within our means. If we have to afford less government, we have to put less government in place.” [Eric Turner]

This from two members of the council who voted to spend $55 million on expanding the Civic Center, spend $37 million to build a hotel (including a $9 million developers fee), give away the $10 million Sears block for $1, give away the $2.8 million Kellar Branch for $1 (and indirectly cost the taxpayers $1.25 million for its acquisition by the Park District), back a $3.3 million loan to now-defunct Firefly Energy (resulting in over $1 million owed by the City)… need I go on?

“If you are a citizen of Peoria and open your tax bill each year, you will see your taxes have been increased year after year…. I do think it’s important we continue on the city side to hold our property taxes away from an increase.” [Ryan Spain]

Apparently, all other taxes are okay to raise. Fees on our water bills, taxes on our Ameren bills, sales taxes downtown, the continuation of HRA taxes to pay for the overbuilt Civic Center — these apparently don’t have any affect on citizens. As long as we “hold our property taxes away from an increase,” then the quality of life here is golden!

A word to the wise: Council members in glass houses shouldn’t throw stones.

City Council, City of Peoria, Taxes

New utility tax proposed for Peoria

27 Comments

The Journal Star did a good job of covering this:

By a 9-1 vote, the City Council approved a tax on natural gas usage, which would equate to roughly $24 to $25 a year for the typical residential customer of Ameren Illinois….

Originally, the council had planned to approve a 3.5-cent-per-therm – a measurement of gas use – tax that would generate $6 million a year, resulting in $32.97 more in annual residential bills.

Fourth District Councilman Bill Spears, though, recommended a cheaper 2.5-cent-per-therm tax [which could generate roughly $4.3 million annually].

Proponents of the new revenue stream say it will allow the City to keep those police and firefighter positions that were threatened to be eliminated. They also point out that the tax applies to all natural gas users, including non-for-profit institutions like hospitals and churches, thus spreading the pain among a larger base than other proposed taxes. Critics say it protects wasteful spending that should be cut first before new revenues are added. They also say it will present a hardship on many households, especially those on a fixed income, and at the worst possible time — as we’re heading into winter.

Peoria Public Schools, Taxes

D150 to raise property taxes again

54 Comments

From the Journal Star:

The School Board on Monday voiced a consensus seeking what amounts to about $69 million in local property taxes next year, an increase of about 1 percent, but far less than the 6.5 percent increase requested last year…. The proposed levy would add about $18 [to a $100,000 home]…. Prompting that increase is District 150 has 15 schools in need of a mandated 10-year safety survey yet this year and another 11 schools next year.

According to 1470 WMBD:

[Interim Comptroller/Treasurer Dave] Kinney says the levy would allow for about $700,000 more to be collected toward the life safety inspections – which are required by law – but it’s just a start. “With the first eight schools on the list it’s looking like about a $6-million price tag over a five year period,” says Kinney. “It’s not anything we have to address immediately but going forward we know we’re going to have to address it at some point.” …Kinney says the levy alone does not completely solve the district’s budget deficit. “There are going to have to be other decisions made to help not only balance the budget this year but next year, too, “says Kinney.

In other words, once again we’re going to be paying more for less. It will be interesting to see how current school board member Jim Stowell votes on this tax increase, and how that decision affects his run for Peoria City Council.

City Council, City of Peoria, Taxes

Township property taxes are going up

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On the agenda for Tuesday’s City Council meeting is this item under Town business:

RECOMMENDATION: Approve the Proposed Estimated Tax Levy of $2,179,219 with an estimated tax rate of .13663 for the Town of the City of Peoria and enter this action into the permanent record.

The item goes on to say that “the proposed estimated levy of $2,179,219, represents a 2.5% increase in the aggregate levy over last year’s tax extension.” Translation: taxes are going up. The tax rate itself may not be going up due to increases in home values (EAV), but don’t let that fool you. When a government body levies more money than the year before, that’s a tax increase.

Taxes

Illinois Policy Institute advocates TIF reform

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The Illinois Policy Institute, a non-profit think tank, has issued a new report calling for reform of the Tax Increment Financing process. It’s called Tax Increment Financing: Hidden in Plain Sight. The article uses examples from Chicago almost exclusively, but the information is applicable throughout Illinois. The Institute says more transparency is needed in establishing TIF districts, and the State needs to adopt a stricter definition of what constitutes “blight.”

That last part is certainly true, not only because of the impact it would have on TIFs, but also Enterprise Zone status. In Peoria, the most abused economic development tool is the Enterprise Zone; it’s supposed to be applied to “blighted” areas, but take a look at the Enterprise Zone map (available from the City’s website here) and notice how much of the zone is applied to far north Peoria, even north of Route 6. The Enterprise Zone was even used as an incentive for annexation at one point. I would suggest that it’s not just a stricter definition of “blight” that’s needed, but stricter enforcement.

The report quotes liberally from a 2006 study by the Lincoln Institute of Land Policy which found that “non-TIF areas of municipalities that use TIF grow no more rapidly, and perhaps more slowly, than similar municipalities that do not use TIF.” This is significant because it means, in addition to other taxing bodies losing out on new tax money received within TIFs, they also suffer slower growth in the areas outside of TIFs.

There is currently a new TIF being developed in the East Bluff.

(Link to report on Scribd site)

City of Peoria, State of Illinois, Taxes

Come watch the rich get richer

15 Comments

From my inbox, this notification from the City Clerk’s office:

WE HAVE JUST BEEN ADVISED AND YOU ARE HEREBY NOTICED THAT A MAJORITY OF A QUORUM OF THE CITY COUNCIL OF PEORIA, ILLINOIS, HAVE BEEN INVITED AND MAY ATTEND TO WITNESS ILLINOIS [GOVERNOR] PAT QUINN SIGN THE HISTORIC TAX CREDIT FOR THE PROPOSED HOTEL PROJECT ON MAIN STREET ON SATURDAY, JUNE 19, 2010, AT 9:15 A.M., AT THE PEORIA MARQUETTE, CHEMINEE BALLROOM, 501 MAIN STREET, PEORIA, ILLINOIS.

Please note this is not a meeting and no official action will be taken.

Tax credits for a guy making $9 million on this Wonderful Development, after he’s already received a $37 million gift from the city. That’s capitalism?

Thanks, State of Illinois. At least you can afford it. Oh, wait….

City of Peoria, Kellar Branch, Museum Block, Peoria County, Peoria Mayor, Peoria Park District, Taxes

PJS Editorial pretends City asset giveaways have nothing to do with budget crisis

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A couple of responses to today’s Journal Star editorial. First, there’s this:

Even Mayor Jim Ardis, who never saw a tax increase he didn’t greet with contempt, seems to have come to the realization that City Hall probably can’t cut its way out of this.

That’s not exactly accurate. Mayor Ardis happily voted to increase sales taxes by 1% within the Hospitality Improvement Zone downtown.

And then, there’s this:

As a result [of the need to make more cuts to city services or raise taxes to balance the budget], a fair number of locals are venting, understandably, though some of them paint either-or scenarios that do not exist. Indeed, the choice is not a recreational trail vs. police officers, or a museum vs. firefighters. The vast majority of the funding for those quality-of-life projects comes out of dedicated revenue streams controlled by other local governments – the park district and county, respectively, with the help of grants. Those dollars couldn’t be used to put more badges on the streets even if the council wanted to. Like them or hate them, those projects — one of them initiated by a successful citizen referendum — are not what created this operating deficit.

First of all, this framing of the argument is obviously a “straw man.” I know of no “locals” who have made the assertions they are countering. Clearly “either-or scenarios” as painted here do not exist. But to imply that these projects have absolutely no relation to the City’s fiscal crisis is also false.

Yes, construction of the rail-to-trail project is funded by the Park District, but it’s only made possible by the City of Peoria giving away a $3 million asset to the Park District for one dollar. The City just threw away $3 million (or at least $750,000, the last bona fide offer to purchase the rail line) while at the same time they need to cut $800,000 from this year’s budget. Why didn’t they put the land up for sale to the highest bidder? Putting this land into the hands of a rail carrier and working with them to woo new manufacturing business to Pioneer Industrial Park would have resulted in raising the tax base in Peoria through new business and new jobs.

Then there’s the Sears block, which has lain dormant for over a decade now because the City won’t enforce deadlines on redevelopment agreements. This is prime real estate that could be parceled off and sold, which would provide a couple of things: income from the initial sale, and on-going revenue from sales and property taxes by the businesses who locate there. Instead, the City is sitting on the land indefinitely, until they can finally give it away for nothing to be used by a non-profit organization that will be a perpetual drain on the county taxpayers.

In addition to the lost opportunity to generate revenue with these assets, taxpayers now have to pay for their development and maintenance in perpetuity. That means we have to pay higher taxes to support these drains on the economy. And that exacerbates the City’s budget woes. Since taxes are high because of increases by other local governments (to which the City directly contributed, as shown above), it puts pressure on the City not to add to the tax burden. And that means the City continues to try to balance its budget by cutting — police, fire, public works, etc.

The Journal Star is simply trying to rationalize its support for non-essential pet projects by using straw-man arguments to dismiss valid criticism.

See also Billy Dennis’s post in response to today’s PJS editorial.

City Council, City of Peoria, State of Illinois, Taxes

City Attorney says nothing more can be done to protect against erroneous sales tax collection

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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?

City of Peoria, Taxes

Tax confusion widespread in Peoria

46 Comments

The local media started looking into (and publicizing) the story I posted a couple days ago about Peoria businesses charging too much tax. The Journal Star has two articles here and here, and WMBD Channel 31 did a piece on the 6:00 news tonight (the web version is here).

I just want to reiterate that you should really check your receipts. My mother-in-law took our family out to eat tonight at Chili’s (Glen and University) and they charged her 11% sales tax (it should be 10%). We told the manager, but there was nothing he could do because it has to go through the corporate office.

After reading the article in the paper, my dad checked his receipt from Best Buy — he bought a new HDTV earlier this month — and sure enough, they charged him 9% sales tax. Best Buy has since corrected the issue, and they refunded him the overcharge with no fuss.

Chili’s doesn’t appear on the official list (Exhibit B) that was released by the city today. Neither is CJ Banks (Northwoods Mall), which is charging 9% on clothing. I hear tell that someone’s keeping a list of businesses about whom residents are complaining overcharged them for tax — and it’s getting pretty long. Plus the Journal Star says the city’s Finance Department has received “hundreds” of calls.

It’s easy to see how these big corporations got confused. Take a look at Exhibit A on this memo. That’s the notice that the state sent to all businesses in Peoria letting them know that a small strip of land downtown was going to have a higher tax rate beginning July 1. To those of us who know what the Hospitality Improvement Zone (HIZ) is, this is easy as pie to follow. But suppose your company’s headquarters are in Minnesota. They would have no idea where the HIZ area was, and they would probably figure that if it didn’t affect them, the state wouldn’t be dumb enough to pay the postage to send them a notice that it’s changing.

That appears to be what is happening all over Peoria. So, double-check those receipts!