The Journal Star is reporting that taxes and/or fees will have to be raised to plug the deficit, according to Mayor Ardis:
Ardis didn’t say which revenue will be increased, other than to say it could be a combination of things, such as a possible sales tax increase or a water utility fee…. The mayor did say it was unlikely the city’s portion of the property tax will be increased, citing other government bodies such as District 150 that have already increased their tax rate. “It would be the absolute last thing we’ll look at,” Ardis said. “(The property tax) is tapped.”
Wait a minute. The reason we can’t raise the property tax is because other taxing bodies have “already increased their tax rate”? That makes absolutely no sense, but let’s just accept it for the sake of argument. Why then should we consider raising the sales tax, considering the county just raised their tax rate? Why doesn’t the same “logic” apply?
And if the city’s revenue-producing abilities are limited because other taxing bodies are raising their rates, then the first thing we need to do is stop giving any of our revenue to those other taxing bodies. For instance, the city should immediately stop giving any tax money to the park district or the school district. Does that mean that there will be no programming on the riverfront? Tough! Does that mean that district 150 won’t get city-provided crossing guards? Sorry! The city needs to use all its available revenue to provide its own core services, not services for other taxing bodies.
Frankly, the mayor’s comments should come as no surprise. A couple council meetings ago, council members were given a packet of information available for download from the city’s website about the budget. Included was this document outlining possible cuts and revenue increases. In fact, since we have that info, here’s what I’d like to do:
I’d like you to pretend you’re a city council member. (You should be feeling a power trip right about now; if you don’t, you’re not pretending right.) Okay, council person? Now, you have to plug a $10 million structural budget deficit by either cutting costs, increasing revenues, or a combination of both.
How would you do it?
You can use the options provided in the aforementioned report, or add your own. It has to be realistic (so, for example, “print money out of thin air like the Federal Reserve” is not acceptable). Also, it has to be a long-term solution because this is a structural deficit. Short-term stop-gap measures don’t count.
Just to make things easier, here’s a summary of options outlined in the report:
INCOME OPTIONS
- Property Tax — Each $.01 added to the levy raises $200,000. The owner of a $200,000 house would pay $6.60 more in property taxes annually per penny.
- Water Utility Tax or Franchise Fee — A 5% utility tax or franchise fee placed on the use of water would yield approximately $1,200,000 each year.
- Sales Tax — An additional .25% increase in the home rule sales tax would bring in an estimated $3,850,000 each year.
- Package Liquor Tax — 2% tax on package liquor would raise about $700,000 annually.
- Parking Tickets — If the $10 fine was raised to $15, an additional $90,000 in revenue annually.
- Garbage Fee — Peoria residential properties pay $6 each month in garbage fees. For every dollar the monthly rate is raised, the City would gain an additional $336,000 annually.
- Motor Fuel Tax — The City currently collects $.02 per gallon of fuel sold. For every penny added, approximately an additional $400,000 in revenue.
- Stormwater Utility Fee — Rough estimates indicate charging $2.00 per month per “residential unit” would generate about $1.2 million.
COST-CUTTING OPTIONS
- Wage Adjustment — Cutting the salary increases of staff from 4.75% (union) and 3.5% (management) to 2.5% across the board would save $1,839,113.64. Cutting them to 1% would save $3,088,880.53.
- Voluntary Separation Initiative — No amount given, but the idea would be to offer early retirement to long-time employees who make high salaries, thus reducing the total payroll.
- Service Cuts/Layoffs — Again, no amount given, since it would depend on which services the city decided to cut. What services do you think should be eliminated? We may be able to find out how much such a cut would save.
- Medical Premium Increase — If the rate at which employees participated in the base premium cost were raised by 5% for all types of coverage, the City would save an estimated $811,000 in FY2010, based on 2009 premium costs. A family membership in the PPO would cost the employee $408.92 each month vs. the current rate of $272.61.
- Reduce Capital Budget — For FY2009, Council approved a Community Investment Plan that funded $21,434,873 worth of projects. Of that amount, only $8,908,895 was in discretionary spending (funding sources not strictly limited to capital projects). This amount represented only 55% of the project funding ($17M) identified by staff and Council.
- Use of HRA Taxes — The primary and obligated use of the proceeds of the Hotel-Restaurant-Amusement Tax is to pay down the Civic Center bonds. Annually, any revenue remaining after bond payments is apportioned by agreement to the Civic Center Authority, Peoria Area Convention and Visitor’s Bureau, ArtsPartners and other community organizations. Many communities use their HRA taxes to support operating or capital projects.
Okay, you have the raw data. Now find $10 million. On your marks. Get set. Go!
Wonder how everyone will react when they see how much Lyons and Settingsgaard have cost the city when this fiasco with unjustly charging 3 officers with crimes they didn’t commit comes about. The officers will recieve backpay from the time they went off once this is done. But overtime had to be paid to fill their spots. Their attorneys fees will ultimately have to be paid by the city since it was on duty and when they are cleared in court, the city must pay. Not to mention potential civil liability cases against both the city and county. The city would have been covered if Settingsgaard had backed his officers.. and the county would have been safe if Lyon’s wasn’t in office.
I don’t think early retirement is a good idea, unless the positions go unfilled, or are replaced with people that make at maximum of 50% of what the retiree made. If a 58 year-old takes such a package that includes some obligation from the city, that employee is partially on the payroll for seven more years. It doesn’t always pencil out that early retirement saves money.
There are certainly different kinds of early retirement, and its possible to use it as a money saving effort, but it has to pencil out considering all of the costs involved over all the years of the deal.
Red light cameras. Raise the parking deck charges. Raise the parking ticket charges to $20. Heck, raise the “garbage fee” – but only if they stop calling it a garbage fee. Charge institutions for the water utility tax.
I’m with kohlrabi51869. A red light camera at every major intersection on War Drive starting at Prospect through Glen. The amount of people blowing left hand turn red lights is unreal. The HRA tax. 20+ years is enough. At LEAST half of that should go into city coffers. $100 Peoria Police booking charge payable, like bond, before release. If guilty, it is kept. Innocent, you get it back. At my job, corporate cut the amount of hours we are able to use for the dollars we take in. We are still expected to do the same amount of work, generate the same income and do so with less hours. Just have to pick up the pace. Maybe the government needs to do so as well. Gotta fit 5 1/2 days of work into 5 and make part of the salary bonus based on actual performance…mine is. Don’t hit those labor numbers… Empty commercial building fee. You abandon a building (move, close, etc.) there is a $250 a week non occupancy fee. I wouldn’t mind a property tax increase IF and only IF the city starts putting needs (roads, sidewalks, police) instead of wants (museums and hotels). What I’d REALLY like to see is a small group of citizens sit down with an independent CPA and auditor and go through the city’s expenses. The professionals can explain why and where the money goes. People who have had to make cuts in their own lives to exist would/could surely fine those same things to cut out of government.
How ’bout efficiency in operations. Instead of $ 6 million worth of equipment sitting idle at a jobsiste and 8 people watching it, just cut that in half!
Anonymous cop: I’m glad that no one was falsely convicted of abusing their authority and responsibilities as a guardian of the peace, and a protector of the public’s interests. Which 3 “innocent” (get the irony Billy?) police officers do you refer to?
(Not the supervisor that stole money from the casino?)
As to saving the city budget… why not extract several million from the capital budget and put into the working budget? Money is money, right? I betcha the city, county, District 150 and most every other cash strapped entity has more budgeted to buildings and grounds (as well as insurance, and other capital investments) than they need and less to people than they could.
“Cutting the salary increases ” ????
How about cutting salaries? These are city (public) employees… right? No one should get more than $50,000 for ANYTHING in the public sector. If you want to “get rich and fat and comfortable” build a better mousetrap and sell it at Walmart.
The Mayor is absolutely correct in that he needs to avoid increasing the property tax at all costs.
Why is that Diane?
Sell the Gateway Building. Stop the Bleeding. Sell the parking facilities the City owns. Sell or Lease the Civic Center. Raising taxes – any taxes – is just going to make things worse.
Cut the pay raise and raise the insurance cost for city employees. Both would put them more in line with the private sector.
Is it possible to increase the property tax on just certain sections of Peoria and maybe just new construction? If so I’d increase the property taxes on all new construction past pioneer park. Maybe have a sliding scale based on how old the house is past pioneer park.
Why should just those north of Pioneer Park pay a higher percentage? They already pay more generally because the value of the home, now they should pay a higher percentage? Maybe yours should be increased as well Bob and everyone with a home value lower than yours should get a decrease? Would you be in support of that as well?
The ability to levy taxes is like granting a group of people a license to smoke crack.
Imagine that there was such a body – that per city charter allowed 11 people in the community…to smoke crack. And the crack would be paid for with public funds. To get the license, you would have to be elected by the voting public to one of the 11 positions. The 11 who were elected could then determine to tax the electorate for funds to pay for the crack.
For a while this worked, because everyone was completely against any crack smoking, but by and by there was one secret crack smoker that got on the council. Now he was clever enough not to come out and say….if you want my vote I want some money for CRACK, rather he used his vote to set up a department with a department head who was also a crack smoking sympathizer who could then use a vaguely writtten budget mandate to justify the legal purchase and use of crack within the departments programes.
And since everyone was consensus building collegues and needed the crack smoking councilman’s vote, everyone just sort of looked away. But over time it got out to the crack smoking community, albeit a minority community that if they could get a job with the city they could get a piece of free crack from time to time. So pretty soon there was a motivated constituency of crack smokers that made damn sure cmoe election time that one or more of their sympathizers got elected and managed to levy some funds for crack.
And over time those who were against this were maligned by the crack smoking sympathizers in the press, so they stopped bothering to run for election and in many cases just moved out of the crack smoking jurisdiciton.
Eventully the majority of those elected were crack smoking sympathizers, so things got even worse. Now the orienting of funds for crack smoking was not even hiddend and the elections for the positions that could assess the levy and distribute the crack became even more coveted and hotly contested.
The story ends with the primary purpose of the organization to facilitate acquiring the funds, purchasing and consuming of crack.
If you think this sounds strange, look at how the primary purpose of governments has devolved to being about the good of the government rather than the good of the governed.
And if you think the crack smoking analogy is too far out you need to review 19th adn early 20th century Chinese history. Like I once said to a Chinese professor – how else did the British get the Chinese to sign that lease for Hong Kong. The Chinese were all high on opium. The professor laughed and said that I was 100 percent correct, and that he was surprised that an American would know that history.
Or, you could just increase the real estate taxes for anyone named “Bob”.
We legalize [and tax] prostitution.
I’ve heard that kcdad moonlights as a pimp [daddy]…?
Put one of those camera ticketers at Main and University and at Main and Farmington Rd. Problem solved.
Who was it that had the nice graph highlighting tax rates in Peoria going back to the 1960s, 50s?
There was a big push in the late 70s and early 80s to drive local taxes down, with success, and they plummeted. About the same time, because basic services and programs were slashed, neighborhood deterioration took a sharp turn downhill, crime started to go up, flight accellerated…. Coupled with Cat’s big troubles in the 80s and well… it could be argued that not much was gained for the community in general by that huge slashing of the tax rates. As I recall, since then rates have steadily crept up but are still far far from where they were in the early 70s.
I don’t think it is unreasonable to consider a property tax increase that is firmly rooted in basic services. Slashing payrolls seems to me to be a bad bad idea. Too many departments are grossly understaffed imo. When I need a policeman I want to know he will be there and in a proper disposition. When I need a fireman, I want to know he will be there stat. When I call code enforcement, I expect… well expect enforcement (which is very inadequate atm). I want planning and economic development staff to have the resources to do their own research, their own studies, and come up with their own ideas of what is best for the community rather than relying on developers to decide it for them because they have too few resources.
Some pedestrian got hit the other day crossing at Main and Univ by some asshat who didn’t stop. No word on whether a cell phone was involved.
Uni Gov.
Combine the county and city services Why have 2 police departments, 2 public works, 2 fleet services, on and on… They combined the health department some time back. it works.
11Bravo and Diane,
I’ve had my taxes raised for less logical reason’s than what you two propose. So why not. 🙂 It obviously costs the city more money to provide services further and further out from the center of Peoria. And the City’s population definitely hasn’t grown for quite some time. So as people move up in housing it’s bound to leave more vacant properties in older parts of the town. So with those two factors does the City really bring in more property taxes from the new subdivisions despite them paying a higher amount than before the new subdivision? Shouldn’t maybe the city charge them the increased cost for getting the benefits of city services that far out?
Well, you all saw what happened back in December when the bottom dropped out of the mortgage and housing market, right? Everything else followed. So if you want the local economy to keep sucking, raise property taxes.
Bob, you’ve got a point. But I don’t think that the blame and punishment for poor management of resources should just get passed along to any one group, in this case those on the north end. That fault really falls on city planners for trying to reduce suburban flight by just annexing part of the suburbs.
Wouldn’t it be nice to just do a little bit of everything that CJ has listed above? Not go overboard with any one thing but a slice of all of it and solve our problems. Big problem with that, of course, is that next year we will be right back in the same boat, because those that got us here in the first place will still be in office. And the cycle never ends.
So are we being governed by idiots?
diane writes ……
# dianeon 26 Jun 2009
Well, you all saw what happened back in December when the bottom dropped out of the mortgage and housing market, right? Everything else followed. So if you want the local economy to keep sucking, raise property taxes.
What about the sales tax increase for the museum (et al public facility purposes)?
Should we still proceed with this project in view of the continued deterioration of the City, County, D150 and PPD financial statements?
I know that it is important to set goals. I know that it is important to achieve goals. I know that it is important to keep evaluating information as it comes forward.
* Deficits at every turn for this year, 2010 and who knows how many years to come.
* Sales tax revenue down.
* Other revenue down.
* Unemployment up.
* Utilitiy rates looking to go up.
* Basics going up.
* Developer handouts going up.
* Taxes going up (although tax rates may be at the same rate)
I cannot decide if our community has hit an economic iceberg and we are still waiting to see what is under the waterline and/or we are in an economic tsunami.
So, still full speed ahead for the museum? Just seeking to understand….
Dizz: I think that we are governed by people that think WE are idiots.
Diane: I would think that a real estate person would welcome a stabilization of prices.
Are you suggesting we artificially raise price of homes by raising the property taxes?
If so, we could levy a tax on bathrooms. Every bathroom a house has has to (I just wrote “has has”) pay an additional 10,000 to the city or county…. that way a house with three bathrooms would automatically be worth $30,000 more. (That would provide you with a $2100 sales commission bonus, too! Right? 7% of $30,000?)
A tax on bathrooms…. I’m liking that.
“Utilitiy rates looking to go up.”
Yeah… look for Natural Gas to double by Christmas. Was reading an article in the Wall Street Journal that pretty much said natural gas was very underpriced versus oil.
KCDad – what on Earth are you talking about?
Yes, Karrie – full steam ahead on the museum. I have never once heard anyone complain about an extra 1/4 of 1% on a candy bar. I do however, hear people complain about property taxes at least every day. Property taxes impact our standard of living. Sales taxes do not. No one makes a decision to move here or not based on the sales tax rate. Apples and oranges.
Diane– That wouldn’t have anything to do with the fact that you’re a realtor and not a cashier, would it? I mean, I don’t hear people complain about either tax, but I do hear people complain when the on-screen text is too small on the TV show I edit.
Taxes are taxes. If property taxes impact our standard of living, so do sales taxes. They take the same thing (money) from the same people (taxpayers) and deliver it to the same place (government coffers). The only difference between these taxes is that you approve of one and not the other.
Karrie,
You will never convince Diane [or any of the other museum supporters] that they made a ‘mistake.’ The price of everything is jumping. By the time this thing is built [if it is built], what will the cost be to maintain it?
Maybe the museum group is still ‘banking’ on getting more money from the Fed? Maybe the state, which is cutting nearly every social program, will fork over a few millions to help us BUILD our museum? That should keep everyone smiling!
By the way…how many millions short is the museum now?
YEP! Full steam ahead!!!!
Diane, why DO people make the decision to move here [or anywhere]? A Regional Museum?
Well no… I am not thinking pay toilets. But I do find the whole marketing of homes with 3, 4 or more full bathrooms to be a absurd. The way real-estate agents poo poo 1 bathroom homes is absurd too. Your parents, grand parents, and possibly great grandparents (with their likely larger families) all got along just fine with ONE bathroom. Who wants to clean all those bathrooms? I only recently moved into a home with 1 1/2 bathrooms. It sucks… yes it sucks to have to clean two bathrooms.
All those developers who want to put a bazillion bathrooms into these new homes… yeah lets tax by the bathroom. Would provide an incentive to move back to older neighborhoods with their all too common 1 bathroom homes.
diana, diane, diane vespa who is the real one?
Methinks dianA is name hijacking.
I think the City needs to look at the departments who have the biggest budgets and let them figure out how they need to cut by 10%. They ususally have the largest salaries for the layers of management and such. There are several departments with several managers in them who are well above or close to $ 100,000 and the higher ranking employees who are also close to that. I am sure this could save a lot right up front.
CJ the big difference here is the “taxpayer” base. The sales tax is applied to everyone who lives, works in, or simply visits Peoria. It is a much broader base, has a built-in fairness factor by taxing everyone who benefits from Peoria amenities and captures money we might not otherwise get.
Property tax on the other hand penalizes the same people that are already shouldering the massive burden of city services including police and fire, schools, pensions, airports etc.
“Property tax on the other hand penalizes the same people that are already shouldering the massive burden”
oh Diane…
Right, because my landlord just eats the cost of property taxes because it is his burden so I can just live all fun and fancy free *only* paying sales taxes.
Landlord…now, there is a great word… when did that take on a “good” connotation?
When I moved to Las Vegas it was cheaper to buy a home than to rent… how can that be? I figured it was just Las Vegas… lots of transients. THEN, I found out when I moved back here it was the same… how can that be?
I buy a house with a $500 a month mortgage and insurance and another $100 or so for expenses and upkeep… Then I charge $750 a month rent… for two people… each.
If one can not afford to buy a house… how can one afford to rent? Diane?
plus I (as landlord) keep all value in the house… I gain all the equity that my renters are paying. What a great deal.
Google red light cameras. You will find out that in Seattle a class action suit has been filed alleging fake tickets have been issued.
Though if fake tickets could be issued………..