Tag Archives: Taxes

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

No choice but to tax us more, Turner says

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The Peoria City Council endorsed the creation of yet another tax Tuesday night. This time, the tax is on natural gas:

By a 7-2 vote, the council endorsed a “hybrid tax” in which two different assessments will be levied on natural gas users. The first, which will affect residential, commercial and industrial customers, is a 3.5 percent tax on gross receipts resulting in about $33 to $34 more for the typical residential user each year.

The second is a $0.0035 (35 hundredths of a penny) per therm tax on larger consumers who purchase natural gas on the open market.

The tax is expected to generate $2.2 million in 2011, and $2.4 million in years thereafter. The 2011 tax will be assessed on February’s Ameren bills.

So now, during the coldest month of winter, the City is going to start taxing everyone for their natural gas usage. Councilman Eric Turner said (according to the Journal Star), “There is no one around this horseshoe who wanted to do this. (But) we did not have a choice.”

I suppose it’s true enough that the council had no choice but to raise revenue in some way, but that’s not really the whole story, is it? The truth is that the council left itself with no choice because of prior poor decisions.

For instance, there was the Firefly loan guarantee that cost the City over a million dollars. There was the $2.8 million-appraised Kellar Branch rail line that the City gave to the Park District for $1. And the $10 million Sears block that the City gave to Peoria County for another dollar. Let’s not forget the $55 million the City spent to overbuild the Civic Center and the $34 million they’re poised to spend on a hotel to connect to it (this amount includes a developer fee of $9 million).

Some of that money was in assets that could have been sold. Some of it is debt that we are or will soon be paying. And some of it is in cold hard cash. But all of that money is flying out of our pockets due to poor decisions. Now the chickens are coming home to roost, and we suddenly do “not have a choice” but to raise taxes on Peoria residents.

It’s like a guy who spends his paycheck on cigarettes, alcohol, and poker games coming home and telling his wife, “Gee, honey, we have no choice but to pay our bills with the credit card this month.”

No choice, indeed.

City Council, City of Peoria, Taxes

New utility tax proposed for Peoria

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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

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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 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.

Education, State of Illinois

“Raise my taxes!” the people cried

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I never thought I’d see the day that I’d read this in the paper: “…the crowd turned to face the Capitol and shouted ‘Raise my taxes.'”

A rally of 15,000 people from throughout the state roared in anger and frustration outside the state Capitol on Wednesday, protesting budget cuts affecting education and social services…. Sen. Dave Koehler, D-Peoria, co-sponsored legislation in the Senate calling for increasing the state income tax from 3 percent to 5 percent.

That’s right, a crowd of Illinois residents, including many from Peoria, descended on Springfield yesterday imploring lawmakers to raise their taxes — and not a little bit, either. Going from three to five percent is a 67% increase.

Raising taxes in order to maintain/increase spending is not the answer. Instead, reforms should be made to the pension system, and programs like FamilyCare/AllKids need to be means-tested. There are undoubtedly some programs that could be cut completely.

If anyone thinks that more money is the answer, look no further than the lottery. Remember that? The lottery was going to help schools! Well, they kept their promise. The proceeds from that tax on the poor did go to schools, but then they reduced other spending on schools by a commensurate amount, so it was a zero-sum bargain — an accounting trick. They found other ways to use the net increase in funds, and it wasn’t to help schools.

I guess it shouldn’t surprise me that people would ask to have their taxes raised. After all, they voted for an increase in their sales taxes here locally in the middle of a recession to pay for a non-essential boondoggle. I guess it really is better here — residents have money to burn.

City Council, City of Peoria, Illinois American Water

Water rates could skyrocket

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Future water bills will be significantly higher if Illinois American Water Company and the City of Peoria get their way.

Illinois American Water Company (IAWC) wants to raise rates about 5% for infrastructure improvement, plus another 30.18% for a general revenue increase to cover higher operating expenses. The City, also in need of more revenue, is considering the possibility of imposing a 5% water utility tax to take effect next spring.

Let’s see, 5 plus 30.18 plus another 5 . . . that’s a 40.18% increase! That means a family that currently pays $30 a month for their water bill will be paying $42.05 (and this doesn’t include the $6 “garbage fee” that will remain on the water bill as well). That’s an increase of $144.60 per year. Wow!

Speaking of the garbage fee, they’re simultaneously looking at cutting the very services that fee supports. They’re suggesting the elimination of free landscape waste pickup — transferring the cost of that service to the users.

Meanwhile, downtown parking will continue to be subsidized. Priorities, you know….

Look for the exodus from Peoria to continue.

City of Peoria, Taxes

City should raise taxes, not cut costs

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The City of Peoria is in a world of hurt. Because of the recession, revenues are down. Way down. In fact, according to a report prepared for Tuesday night’s council meeting, “Staff is anticipating $3,334,129 less revenue than previously forecasted, which would result in a budget deficit of an equal amount.”

As a result, staff is trying to figure out a way to make up the difference. Curiously, they’re trying to do so through fiscally conservative methods, such as contract adjustments, expenditure reductions, revenue-generating activities, and reserve funds. In other words, they’re trying to save money without raising taxes.

But why? If the recent election has shown us anything, it’s that the vast majority of Peoria residents don’t give a hoot whether their taxes are raised. Most of them couldn’t be bothered to drag themselves downtown for early voting, or out to their polling place on a beautiful sun-shiny day. A majority of those that did voted to raise their own taxes for a non-essential project in the middle of an economic recession — some would say depression.

You know what that tells me? That tells me that the city council should stop stressing out about cutting costs and looking for other forms of revenue. In fact, they shouldn’t change a thing about their operating budget. They should simply figure out how much additional revenue they need, and then raise taxes to cover it. Done.

After all, the museum group didn’t look at any other alternatives to downsize their project, or to increase revenue-generating activity, or renegotiate contracts (like using non-union, but prevailing-wage labor), or any number of things that would have made their project more affordable. Yet, the majority of the few registered voters who turned out voted to give them $40 million anyway with no strings attached.

Not just the voters, either. Caterpillar, the Chamber of Commerce, almost all elected officials, District 150, the Peoria Association of Realtors, etc., etc., etc. — they were all for raising taxes. How could any of them complain if the city were to do the same for essential services, such as police, fire, streets, and sidewalks?

I’m calling on all those who supported and voted for the sales tax referendum to write their city council members and demand that they not cut spending, but increase taxes instead. Since we’re all so flush with cash, let’s start using it in the areas that are the most needy.

Museum Block, Peoria County

Reasons for spiking school referendum weak

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By now, you’ve probably heard or read about how museum supporters successfully discouraged efforts by county school superintendents to put a referendum on the April 7 ballot. That referendum would have been very similar to the museum referendum, only instead of money going toward a museum and big-screen theater, the money would have gone toward school facilities in Peoria County. Each school district would get a portion of the sales tax proceeds based on enrollment. Museum supporters decided county residents shouldn’t have that choice because it would threaten passage of the museum tax. You can read the letters here.

The Journal Star got reaction from some museum supporters.

“We met with school superintendents and in very cordial conversations decided it seemed to be a matter of timing,” [Michael] Bryant [head of the CEO roundtable and the CEO of Methodist Medical Center] said. “The superintendents didn’t have a plan or projects ready, when on the other hand, the museum’s time is now. After April 7, if the referendum doesn’t pass, the museum goes away.”

First of all, this is simply false. The superintendents did and still do have projects ready. IVC is ready to build additions. Brimfield needs a new high school. Peoria Heights wants to pay off bond debt which will lower property taxes in the village. And I think we all know that District 150, which would receive the lion’s share of any sales tax proceeds, has just a few building projects underway or commencing soon. I frankly don’t know how anyone could claim with a straight face that school superintendents in Peoria County “didn’t have a plan or projects ready.” Why would they even be pursuing this option if they didn’t have a plan for how the money would be used?

But secondly, and more importantly, there’s no requirement under the statute that the superintendents have a plan before asking for a referendum to be placed on the ballot. So the argument is a red herring anyway.

“The county made the museum a top priority in February of 2008 and started working toward the goal of finding a funding mechanism,” [County Administrator Patrick] Urich said. “We met with school officials last summer and talked about the path the museum was on and that it was first in line with the sales tax referendum. The fact that the museum group definitely had a plan in place and the schools had no definitive plan on how it intended to spend the money kept us on this path.”

What is this imaginary “line” to which Urich refers? The statute states that if school districts representing 51% or more of the county’s total school enrollment votes to put a referendum on the ballot, the county is obligated to put it on the ballot. The county is not the gatekeeper as Urich implies — there is no statutory limit on the number of referenda that can be placed on the ballot, and referenda are not placed on a first-come-first-served basis. There is simply no “line” in which to wait.

Anything the county had to say to the superintendents would have been advisory at best. And that begs the question: Why was the county meeting with the school superintendents? Was the county also trying to dissuade them from putting the school funding referendum on the ballot?

Bryant said school districts will have future opportunities to see if voters are willing to raise sales taxes to pay help schools. The museum won’t.

With all due respect, that’s the museum’s problem, not the school districts’. Schools should not have to take a back seat because the museum group has been incapable of raising the funds they need over the last seven years.

Peoria Public Schools

More debt for District 150

35 Comments

I heard about this late last night:

The School Board on Tuesday approved seeking $14 million in tax-anticipation warrants, amounting essentially to a short-term loan, and spending tax money – now some $30 million – usually reserved for next year’s operations.

“We don’t have cash on hand to pay bills in a timely fashion,” said Brock Butts, a former longtime Tremont school superintendent recently hired as District 150’s interim controller, citing “concerns” of meeting payroll next week….

“In the future, we are going to have to do one of three things,” [Interim Treasurer Norm] Durflinger said. “One, significantly cut expenditures; two, significantly increase revenues; and the most likely is the third, which is both.

Hello, higher taxes.