By Bob Balgemann

Reporter

Budget and Finance Officer Becky Tobin has provided city officials some highlights of the new spending plan, which went into effect May 1, and a heads-up of the sources of revenue she is watching for impacts from the coronavirus pandemic.

That monitoring will continue after businesses start to reopen and the city, at some point, goes into its “new normal,” she said.

* First among the revenue sources mentioned was the 2-cent local motor fuel tax, which city council approved in September 2018.

“Gas stations are still operating, but with the ‘stay-at-home’ order there has been less travel and purchases are lower than they normally would be,” Director Tobin reported. “We have received checks from most of the gas stations for March (sales). There’s nothing alarming right now, but we have to remember that things didn’t close until three weeks into the month (of March).

“The biggest impact there will obviously be the Oasis” along nearby Interstate 90, she said. “That’s a huge revenue source for us and without all the travel, that’s what I’ll be looking at.”

* Home rule sales tax and municipal sales tax, which she is expecting to be affected by COVID-19. However, there was a positive aspect to that report when she said, “We don’t think these revenues will hurt us as bad as some other municipalities, because we don’t have huge mega-retail centers. We don’t have hotels. So we don’t have those kinds of businesses being closed, as with a number of other municipalities.

“Belvidere’s biggest revenue sources for those sales taxes are Wal-Mart, grocery stores, and Walgreen’s,” she said. “These places are busy every single day. So that makes me feel a little bit better about what our sales tax is going to look like. And your automotive places, from what I’ve seen so far, are doing Ok.”

Restaurants are still open, she continued, but they don’t have as much traffic because not that many people are out. “So, I’m anticipating that (income) will be down.”

Overall, she said, “A lot of our revenue sources are all right for right now.”

Other taxes

Tobin reviewed some other taxes, such as the local use tax, which is generated through online purchases being made by residents.

“You can imagine what that looks like right now, because everyone is buying online,” she said. “So I’ll be interested in the next couple of months to see what that looks like.”

*State income tax. With the high level of unemployment, she said she’s really concerned that “this (loss of revenue) could hit us rather significantly.”

* Video gaming tax. “Right now that’s a zero,” she said. “Know it’s a zero for April and probably for May as well. That’s (a loss of) $32,000 a month.”

* Another source is the property tax, which she said “is really important.” That’s 28 percent of the city’s revenue, which has not increased in the last three years. This year’s income estimate is $1.769 million, which ranks third behind the municipal sales tax ($3.661 million) and state income tax ($2.686 million).

* Two sources of revenue that aren’t in the 2020-21 budget are the cannabis tax and the utility tax, the latter now including natural gas purchased from other states.

Tobin said the state takes seven percent of the cannabis tax with eight percent going to local government. For Belvidere, that meant $2,400 last month, with an expectation of $24,000 a year.

City council in March approved taxing out-of-state natural gas purchases, which had escaped Belvidere coffers for a number of years because of state deregulation. She said she plans to budget conservatively, and is figuring on $600,000 for 2020-21.

In summation on city income, she said, “There is some good news. Obviously the gas tax will help; the cannabis tax will help a little.”

Expenses

One important reminder from the budget officer was that even though items are in the new budget, they will not be purchased unless authorized by city council. “If the money’s not here, we don’t buy it,” she said. “I think all the department heads here fully understand that. They won’t be asking for anything unless they absolutely need to.

“None of the new hires will take place at this time, even though they are in the budget. Department heads will come back to council at a later date if they deem those (hires) to be necessary.”

Two major recurring expenses are police pensions, $1.4 million, and fire pensions, $1.15 million, which combined is five percent higher than last year. But health insurance for employees “had a really good year, so the (premium) increase is only 2.1 percent,” she said.

After she concluded her update, Mayor Mike Chamberlain said aldermen would be receiving monthly reports on revenue and expenses, “so you know exactly where we are.”

Alderman Marsha Freeman had a question about the income tax, saying “that could go either way, negative or positive, with the census, right?”

Yes, Tobin replied, but added the city would not be affected until next year, when the new population totals are tabulated. “The census (count) has been pushed out to August because of COVID, which is good. A lot of door-to-door hasn’t been able to take place.”

“Every two weeks it’s pushed back,” City Planner and Events Coordinator Gina DelRose said. “Right now final tallies won’t be done until October. As of this morning, Boone County was Number Five in Illinois (among 102 counties) when it comes to responding. Belvidere was in the top 22 percent of all cities for responding. So we are doing pretty good.”

 

 

 

 
 
 
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