The deadline for city officials to balance Evanston’s $3 million deficit grows closer every day — but questions about the budget issues are still coming in.
The city’s fourth outreach meeting, held Thursday night, outlined the city’s deficit to about 20 residents at the Robert Crown Center, 1701 Main St. City staff presented residents with a background of changes in city revenues and expenditures that City Manager Roger Crum will consider in creating a budget proposal to present to Evanston City Council Dec. 31.
Patrick Casey, director of management and budget, said the root cause of the crisis is more than increased expenditures and decreased revenue. He attributed the city’s current budget crisis to a decrease in state-shared funds, such as sales tax and the current recession the state is facing.
“The economy has gone south and we’re losing our share of state income (tax),” he said.
The city is experiencing a 3 percent increase in total revenues but a 5 percent increase in expenditures over the next five years. Although the city anticipates more than $71 million in revenue for the general fund next year, it is projecting more than $74 million in expenditures.
Casey said some of the revenues the city acquired this year, such as tax from extended liquor sales, are not substantial enough to eliminate much of the deficit.
“Extended liquor hours don’t bring in much revenue,” Casey said.
These figures were projected without any employee wage increases, which the city has yet to grant. All four labor unions’ contracts are up for renegotiation in December. Every 1 percent of employee salary increases adds another $500,000 to the budget. In the past, Casey said, contracts have been renegotiated with no wage increases. However, Casey said the city will aim to renegotiate salaries that align with the current cost of living index of 1.6 to 1.9 percent.
City staff have said property tax increases will likely be used to balance next year’s budget. At a City Council meeting last month, Ald. Arthur Newman (1st) suggested balancing the budget using an equal combination of property tax increase and service reductions. Every one percent of property tax increases adds $145,000 to the city’s revenue, according to city staff.
Although residents paid more in taxes this year than last year, the city lost almost 1 percent of its share of the taxes this year. The city received almost 18 percent of city residents’ property taxes this year, down from almost 19 percent in 2001.
A large amount of nonprofits in the city also means property taxes account for about 20 percent of the city’s revenue, compared to almost 25 percent in similar municipalities in Illinois.
The majority of residents’ taxes go to local school districts. Evanston/Skokie School District 65 receives almost 39 percent of residents’ property taxes and more than 27 percent is allocated for Evanston School District 202. Taxes are also allocated for nine other taxing bodies — including Cook County, the mosquito abatement district and the water reclamation district.
Last year the city balanced the budget with a combination of property tax increases, staff cuts and program and service reductions. Casey said he anticipates similar methods will be used again this year. However, reductions of most city programs, including the Summer Youth Employment Program, animal control and emergency assistance would have a “tiny impact,” Casey said. These cuts would save the city $800,000. Similarly, large scale staff cuts will have to be made to have an impact, Casey said. Cutting 10 staff positions reduces the deficit by $500,000.
Evanston resident Susan Horowitz, who attended each of the city’s outreach meetings, said she’s impressed by the response residents have shown at the meetings. Horowitz, also the former mayor of Iowa City, Iowa, said residents who want to avoid a tax increase in favor of service cuts are facing a hard choice.
“Evanstonians are going to have to ask themselves, ‘Can we afford to decrease the services we want to have?'” Horowitz said. “They’re going to have to do some hard thinking.”
Although city residents have suggested that council members focus on more long-term changes to the budget to alleviate the deficit in future years, Ald. Steven Bernstein (4th) said that kind of approach isn’t applicable to a city like Evanston, whose infrastructure demands “reactive” action.
“We’re starting to talk about five, 10 years down the line, but it’s tough,” Bernstein said. “If a street falls in, you’ve got to replace it.”
Bernstein, whose ward hosted the meeting Thursday night, said although residents have presented substantial feedback, the meetings have not given him any reason to be optimistic about the budget process.
“We’ve got big trouble coming up,” Bernstein said. “We’ve got to fit a 48-inch waist in size 32 pants. It’s not going to be easy.”
The final outreach meeting will be Nov. 19 at 7 p.m. at the Levy Senior Center, 301 Dodge Ave.
