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Questioning ‘massive tax increase’ on Elgin residents

Updated: January 20, 2013 6:22AM

Questioning ‘massive tax increase’ on Elgin residents from newly OK’d budget

On Dec. 14, the Elgin City Council held its last budget meeting before adopting the 2013 budget. My comments below were made to the council before it voted 6-1 approval of the proposed budget.

Tonight you’ll consider passing the 2013 budget for the city of Elgin. I want to point out that while you’ve reduced the property tax levy over the last two years about $6.3 million, you’ve increased and created new taxes of about $21.2 million over the same period of time. These numbers come right from your own budget documents. Needless to say, this is not just “revenue diversification” but a massive tax increase on the people and businesses of Elgin. All of this at a time when the economy has not improved in any measurable way. This can only be described as a major growth of city government and a drag on our local economy. We don’t have a revenue problem here — we’ve got a spending problem. On top of these large tax increases, your five-year plan also calls for an additional new tax known as the “rain water” tax for 2014 that will net an additional $2.5 million to $3.5 million of revenues. It’s plain to see that if you pass this budget as proposed, that all of these dollars will be taken out of the private-sector economy.

In addition to all of these taxes, the cost of running the city has grown 36.7 percent just since FY 2011. What justification is there for that kind of spending increase during a time when inflation is in single digits according to the federal government? What will the cost of running the city be if we get hyper-inflation? Has anyone thought of this possibility? There’s no reason in the world that we should have this kind of massive increase in spending now. May I suggest that the majority of you reconsider my suggestion from last year to repeal most of your new taxes and start over with less spending.

According to the city’s report to the bond rating agencies dated 2/14/2012, the city expected to show a surplus or (overcharge) of revenues/taxes over expenditures in the General Fund of over $7 million for FY 2012. That number has probably increased due to higher-than-expected revenues from sales tax and liquor taxes to upwards of $9 million. Either way, why does the city need 7.5 percent to nearly 10 percent more of our money than is needed to pay for operations? The only answer I can think of is that you wish to expand spending and conversely the size of the city government. Since we know that employee salaries/compensation and benefits are the largest part of any city’s budget and our union city workers have gotten from 0 percent to 3 percent raises per year over the last three or four years, where is all the extra tax revenues going?

Terry Gavin


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