Northwestern University and Evanston's Only Daily News Source Since 1881

The Daily Northwestern

Northwestern University and Evanston's Only Daily News Source Since 1881

The Daily Northwestern

Northwestern University and Evanston's Only Daily News Source Since 1881

The Daily Northwestern

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‘Doom and gloom’ no more? City Council tackles financial future, tax changes

Shun Graves/The Daily Northwestern
City Council grappled with questions about Evanston’s financial situation and how to address qualms about its liquor consumption tax.

Dire warnings of a fraught financial future for Evanston have long underlied issues ranging from a benefits pact with Northwestern over its Ryan Field rebuild to the specifics of municipal balance sheets.

But a more mixed picture emerged from discussions at City Council Tuesday on a spending update and possible changes to a tax scorned by many local businesses.

“I keep hearing the doom and gloom thing,” Ald. Devon Reid (8th) said. “I trust the folks who are saying it. But year after year, I’ve not seen it.”

Last year Reid himself called the outlook on funding capital improvements “sobering.” But as what he called a “$30 million excess reserve” sits in the city’s coffers, Evanston has also spent less money than expected.

Tuesday’s discussion arose from a staff presentation about the city’s adjustments to its 2023 budget as required by the state. The perfunctory change, called a budget amendment, accounts for actual spending by Evanston compared to what it initially budgeted for. The changes do not necessarily mean the city has run a surplus.

City staff seek to amend the 2023 budget to nearly $345 million — about $52 million less than expected.

While Evanston spent more than planned from its general fund and some smaller pots, the city expended far less of its federal pandemic money and capital improvement funds than initially budgeted. Many of the decreases stem from deferred or uncompleted projects.

Ald. Clare Kelly (1st) questioned Hitesh Desai, Evanston’s chief financial officer and treasurer, over how some adjustments didn’t track with reported spending. He responded that though the city may have spent millions less than even the $52 million adjustment, he left buffers in the amended budget to account for any bills that could turn up in yet-incomplete auditing.

Still, the back-and-forth continued until Mayor Daniel Biss interjected to give others a turn to weigh in. Kelly reiterated her criticisms, even as Biss said he would “continue chairing the meeting” and chastised her “continued rehashing of miscommunications.”

In Tuesday’s procedural vote for introduction, the council approved the adjustment 6-1. Kelly cast the lone “no” vote. City Council later approved the issue of general obligation bonds 5-2.

This budget discussion came after the city avoided hiking property taxes to finance this year’s budget. Evanston must nonetheless remain “cautious” in its future budget planning, Biss said.

“We have a significant excess reserve, which is great,” Biss told The Daily. “We have a structural deficit. We have really significant capital needs related to city hall, fire, police, Noyes (Center) and so on. We’re very fortunate to have the excess reserves, but the long-term trajectory and especially including the capital needs is daunting.”

City revenues came up in an earlier discussion over Evanston’s contentious 6% liquor consumption tax. The levy “is the only tax of its kind” in the Chicago region, an assistant city attorney wrote in a memo to the council.

Biss called on City Council to consider proposals to eliminate or modify the tax — and introduce new levies to cover the $3 million in current income.

The council largely opposed a quarter-point increase to Evanston’s sales tax, citing the potential impact on residents’ wallets. Some members indicated they could support a new 1.5% tax on prepared food and beverages. The levy could include or be in addition to a new tax on packaged liquor.

“Because we do have these large, big box stores that sell packaged liquor — and right now, as has been stated, 70% of our income from this tax comes from them — I think it would be smart for us to make sure that we continue to tax that in a packaged form,” Ald. Melissa Wynne (3rd) said.

As early debates continue, no proposal for new levies will yet face City Council’s vote. Reid said he objected to both the food and sales tax ideas. Biss, a former mathematician, called on the council to ensure the city maintains its income stream.

“There’s a math issue, though, which is that the goal is to add up to the same $3 million in revenue,” he said.

Email: [email protected]

X: @realShunGraves

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