It’s Tuesday evening, and time for another Peoria City Council meeting. I’m coming to you live from Peoria City Hall, Council Chambers. I’ll be updating this post throughout the evening, so refresh often.
Absent tonight are Mayor Ardis and 5th District councilman Dan Irving. Mayor Pro Tem is At-Large councilman Eric Turner.
I received this yesterday but haven’t had a chance to post it until today:
September 15, 2009
As many of you know, the City Council has been wrestling with our 2010 budget for several months now. We have been working to balance the City’s budget like you have to balance yours……. Identifying needs vs. wants and being more efficient with the income you have available. During this challenging economic situation, the process has not been easy.
To this point, the City Council has already trimmed over $8.5 million dollars from next years budget. If sales tax revenue continues to come in below our expectations, it may be necessary to trim another $4 to $5 million to balance our budget. We’ve made significant reductions in our operating budget next year and identified over 40 positions that will not be filled throughout all city departments, including police and fire. In the coming weeks, we may find it necessary to lay off 20-30 more employees. This all equates to a drastic cut in service to our constituent taxpayers.
During this process we have focused on being open and transparent. With this in mind I’d like to solicit your input as we move towards making final decisions on next years budget. This will not be a scientific poll by any stretch, but an opportunity to provide me with your thoughts on a few budget related questions. I will share your responses with the rest of the City Council and the City Manager.
These are tough times but I am confident the City Council will make the right decisions to get us through this with the least amount of additional cost to you. And we hope to get this done with the least amount of job losses possible. Thank you for taking the time to respond. Feel free to pass this on to other concerned citizens.
Please click here to take this short, 3-question survey
Jim Ardis
Think about that next time there’s a burglary in your neighborhood, or when you hit a huge pothole this winter. Maybe you can call council member Ryan Spain and ask him to send over an economic development specialist to help.
—Billy Dennis, in response to the City’s decision, upon Spain’s motion, to spare an Economic Development Specialist while simultaneously cutting police and public works personnel.
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?
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.
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.
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:
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:
Or is it number 2:
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.
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.
I watched part of the council meeting at home on channel 22 (meeting started at 6:15 p.m.), then came downtown to see it in person. So, here I am! I’ll be updating this post throughout the evening, so check back. So far, you haven’t missed much. Department heads are simply getting up and reiterating the cuts they’re recommending in this document:
(09-343) CONTINUATION of a POLICY SESSION Regarding DISCUSSION and REVIEW of the CITY’S SERVICES.