New Elgin budget plan calls for user fees, liquor tax

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Updated: December 30, 2011 8:09AM

ELGIN — A new “balanced approach” to the 2012 Elgin budget hopes to address some of the city council and community’s concerns with previously presented plans to balance the city’s budget, officials said Monday night.

The budget plan proposed during the city council’s special committee of the whole meeting now would reduce the property tax levy by $1 million while raising utility taxes, adding garbage fees, and instituting a 3 percent alcoholic beverage tax to make up the difference.

The new proposal, Stegall said, seeks to address the public’s concerns and those of the city council — that it is more acceptable in its cuts and expenditures, more reliable for long-term income sources, and more equitable across the board and asks those who do not live in Elgin to help pay for city services.

“As the city council is aware, the first” balanced budget version “relied on funds from homeowners,” Stegall said. With the new version, the burden is balanced among businesses, homeowners “and those who do not live in Elgin,” he said.

Stegall said the budget still assumes just under $111 million in revenue. “The bottom line is revenue has not changed,” he said.

With additional revenue enhancements through utility and other taxes, Stegall said, the new budget plan can slice away at the property tax levy, reducing it by another $10 million by 2014.

“We are not looking for additional revenue, we are just coming at it from a different way,” Stegall said.

Those different ways include new fees and taxes — a $13.30/month refuse collection fee, an electricity tax, a natural gas tax, a stormwater utility fee, and the alcohol tax — as well as continuing to transfer funds from the riverboat fund into the general fund, Stegall said.

The $13.30 amount for garbage collection is a pass-through, Stegall said, asking residents to pay directly for the cost of garbage collection. It also is a “blended fee” that seeks to combine the cost of single-family home collection with that of condos or townhouses. The price tag for that, he noted, is lower than the $18 per month previously floated in budget conversations.

At the Dec. 7 city council meeting, Stegall said, he will propose placing a question on the March 20 ballot that asks voters to consider aggregating electrical services for the city of Elgin.

If voters approve the referendum, Elgin would negotiate rates with an electricity provider and possibly reduce electric costs for homeowners and businesses by 20 percent. That reduction, Stegall said, would counteract a proposed electricity tax that would charge residents per kilowatt hour.

For an average home, Elgin Corporation Council Bill Cogley said, the total electricity savings for a resident could be $80 a year — more than the $63 a year the city estimates the new utility and natural gas taxes would cost each year.

The utility taxes are more fair to homeowners, Stegall argued, because businesses use far more of those services than homeowners do.

Mayor David Kaptain added that while the city and residents have little control over property tax, as the county sets home value assessments, residents do have control over how much power they use.

“If they can reduce their energy costs … that will be reflected back on the tax. Our goals should be to encourage people to reduce their energy costs,” Kaptain said.

There was some council debate over plans to transfer more funds from the riverboat money. In the past, Elgin has taken $1.7 million from the riverboat funds and placed them in the general fund to replace city vehicle sticker revenue. Stegall’s new plan calls for $3.55 million to come from the riverboat through 2016, and then go back to $1.7 million.

Council members said they were not in favor of bringing back city vehicle stickers, but said the city should find out how many cars are registered in Elgin now, and base the transfer amount on that.