Tax increases, spending from reserve could fill budget holes

Chris Kirkham

Tax increases, spending from reserve could fill budget holes

By Chris Kirkham

City staff presented a budget proposal Saturday that reflects the state’s economic slump, but aldermen after the meeting said they questioned some of the staff’s methods.

The Evanston City Council must approve the budget by March 1, the beginning of the 2004-05 fiscal year. Saturday was the first of a series of meetings for aldermen to iron out the proposed $164-million budget, but Ald. Edmund Moran (6th) said the council decided beforehand not to discuss any of the budget items at the meeting.

Because the council also had to discuss the potential $20 million in litigation liability against the city in a closed executive session, Moran said they would have a more in-depth budget discussion at later meetings.

City Manager Roger Crum’s proposal includes a 6.85 percent increase in the city’s portion of property taxes — meaning a 1.2 percent increase in an individual’s total property tax bill — and spending $500,000 from the city’s reserve fund. Crum said $500,000 is a “modest” use of the city’s savings, especially considering the statewide economic climate.

Crum said he expects an economic upturn later in the year, meaning the $500,000 lost in reserves would be recouped quickly.

But Ald. Elizabeth Tisdahl (7th) said after the meeting that she wasn’t so sure as Crum of an economic turnaround in 2004.

“I certainly hope Roger Crum’s predictions are right,” she said. “But let’s just say I’m not as much of an optimist.”

Director of Finance William Stafford said if the council neither uses the reserve money nor cuts programs, Evanston might have to increase the city’s proportion of the property tax by as much as 8.57 percent to accommodate. He said nearby cities — such as Schaumberg, Ill., which has a less stable economy — are advocating as much as a $5-million dip into reserve funds.

But Moran said he disagreed with the timing of the withdrawals.

“I can’t quite figure out why we would be going into reserves when there’s a lot of potential (legal) liability out there,” he said. “It sounds to me like there’s been some deals made.”

Moran said the city possibly advocated this move to abate a larger property tax increase.

Stafford said many of this year’s budgetary woes come from decreases in state assistance, which would normally be counted as revenue. Illinois usually returns 10 percent of income tax revenue to cities, but the state came up short this year after distributing income tax returns. That means a $500,000 loss in revenues from the state.

“They said it’s a one-time reduction, but we’re budgeting this as if it’s a permanent reduction,” Stafford said. “This is a situation of the state having financial issues and passing them on to the localities.”

Unlike past years Crum’s budget proposal does not include any cuts to programs, such as branches of the Evanston Public Library or the Fleetwood-Jourdain Theatre. And after a two-year series of city personnel cuts, this year’s budget does not suggest any more downsizing either.

Though Crum said reducing city programs would dilute the quality of life in the city, Evanston resident Junad Rizki said the programs are draining taxpayers’ assets.

“I think there’s plenty here in this budget that could go away,” said Rizki, who ran unsuccessfully for Seventh Ward alderman in 2001. “(New residents) are not moving here because of programs, and soon they’re going to be upset. … This council doesn’t want to increase efficiency.”