Northwestern administrators, business leaders and realtors say they oppose an increased tax on wholesale natural gas purchases, but some aldermen say they think it will be necessary to balance the city’s 2004-05 budget.
The proposal would increase by 163 percent the city’s gas-tax rate for institutions, including nonprofits and condominiums that buy gas wholesale from companies other than Nicor Inc., the city’s official provider. City staff estimate the tax would bring in $600,000 per year for the city, and NU officials estimate the university will pay between $200,000 and $250,000 in taxes more each year. The city council will vote on the budget Feb. 23, before the start of the new fiscal year that begins March 1.
“First and foremost we hope that the tax is not enacted,” said Lucile Krasnow, NU’s special assistant for community relations. “The alternative is to enact it at a reduced rate so that it’s not such a large hit.”
City Manager Roger Crum said the proposal would equalize taxes between residents and those who buy gas wholesale and raises revenues for the city without increasing property taxes. It follows a 2003 state increase in wholesale gas taxes that exempted non-profit institutions.
Ald. Lionel Jean-Baptiste (2nd) said he was considering supporting the proposal.
“This is budget time, and budget time means that everyone is tightening their belts, including private residents who have to pay additional property taxes,” he said. He said he would listen to businesses’ concerns about the proposed tax.
The budget proposed by the city manager also included a property tax hike.
Ald. Edmund Moran (6th) said he opposed the gas tax because it would not add new benefits in return. However, he expected it to pass, “just because nobody on the council has an interest in cutting back on anything.”
Dan Schermerhorn, president of the realtors Schermerhorn & Co., said the rents in his apartments, some of which are occupied by students, might have to be increased to accommodate the tax. It could also decrease the availability of affordable housing.
“It’s ill-timed,” he said, “and I don’t think it produces a significant amount of revenue to the cost, in terms of what it might do to businesses in town and their ability to stay in town.”
Dick Peach, president of the Chamber of Commerce, said he thought the tax could drive business out of town — especially since it hits nonprofits like the city’s two hospitals and NU.
“It’s an anti-business tax of the worst kind,” said Peach, who also owns Dempster Auto Rebuilders, 2001 Dempster St. “It hits the three biggest employers we have in town with the highest taxes. All it says to them is we have to find a different place to do business.”
Because of an editing error, The Daily incorrectly reported in a Monday article the percent increase of the proposed change to the Evanston wholesale gas tax. The correct rate of increase is 163 percent, and the proposed tax is 250 percent of the current tax. The Daily regrets the error.
