By Jessica Gdowski
The Daily Northwestern
The Evanston City Council could close a loophole in the law and require local businesses to pay more in taxes on natural gas at its regular meeting tonight.
Alison Zelms, a management analyst for the city of Evanston, said some businesses have escaped paying their share of the natural gas tax burden in the city for the last 10 years.
Most residents buy their gas from the city’s official provider, Nicor, Inc., and pay both the gas use tax and the gas utility tax. But gas consumers in Evanston can also buy natural gas from another broker, which exempts them from the gas utility tax.
Zelms said it is mostly businesses that opt to purchase from another broker, leaving residents to pay the bulk of the use tax.
“Anybody that buys through a broker — you can do that now because of deregulation — is kind of getting their gas in a deal,” Zelms said at the Oct. 13 Administration and Public Works Committee meeting where the proposal was first introduced. “(The proposed increase) would bring those people up to what the Nicor purchasers are paying in tax.”
In an internal memo, city staff recommended that the council raise the gas use tax by 2.5 cents per therm, a small unit of natural gas, for non-Nicor customers. This would nearly equalize the tax on all users’ gas.
But the memo also suggested that the council could raise the tax by up to 3 cents per therm, which would result in higher rates for non-Nicor users.
Zelms estimated that less than two percent of the residential population of the city buys gas from a broker, so only a very small segment of residents will be affected by the proposed tax hike.
The increase could generate between $500,000 and $800,000 in extra annual revenue for the city. Proponents of the increase said they would like to see the change implemented soon, so the city could benefit from the high levels on natural gas used during winter. Supporters of the proposal said implementing the change now will help both this year’s and next year’s budget.
At the Oct. 13 meeting, aldermen sitting on the Administration and Public Works Committee said they are in favor of the increase.
Ald. Gene Feldman (9th) said he expects some response from Evanston businesses that do not use Nicor gas. But he said he does not think this will hinder the tax increase.
“I think it’s going to pass without any issue whatsoever,” Feldman said in an interview last night. “It’s an equalization of responsibility.”
Aldermen at the council meeting also will discuss granting special permission for a residential development at the corner of Chicago Avenue and Kedzie Avenue. The contractors of the residential complex want to build 45 units of housing. Current restrictions would limit them to 35 units. The Plan Commission recommended that the council deny the contractor the request.
The Planning and Development Committee will meet at 6 p.m. tomorrow. The Administration and Public Works Committee starts at 7 p.m., and the full council convenes at 8:30 p.m. The meeting is open to the public and will be held at the Civic Center, 2100 Ridge Ave. The meeting is open to the public.
