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By Bob Balgemann
Reporter
BELVIDERE – An effort to return expenditure of the utility tax to its original intent has failed the first of two steps needed to make it happen.
The committee of the whole voted 5-3 Monday night March 28 to reject an ordinance amendment to that effect, which was authored by Alderman Mark Sanderson. The issue is expected to be revisited Monday, April 4, when committee members sit in on the Belvidere City Council.
Council imposed the tax in 2000, with proceeds going to road improvements and other infrastructure work.
In a 7-3 vote in 2010, the money was transferred from a special account to the general fund, which expanded the way in which it could be spent.
The utility tax generates $1.2 million to $1.4 million a year, and in a memorandum to the committee dated March 24, Budget and Finance Officer Becky Tobin stated losing that money would cause the city to raise property taxes, create a Home Rule sales tax, or lay off employees.
She stated further that the city can’t balance its annual budget without income from the utility tax.
“The utility tax has brought in about $30 million in revenue from its inception in 2000 through FY2015,” she wrote. “There was another $2 million in other revenue sources deposited into the [special] fund over the years … for a total of about $32 million.
“The city has spent about $20,829,800 on road improvement projects from the utility taxes.”
Starting in 2010, she said the city began using some of the utility tax for salaries in the general fund, due to the Great Recession (of 2008) and the revenue shortfall in the general fund.
From 2010 to 2015, Tobin said the city spent about $6.25 million of utility tax revenues on salaries in the police, fire and public works departments. The remaining revenue is in general fund reserves.
“The reserves are extremely important in the volatile financial environment that we have been experiencing over the last eight years,” she said.
On top of that, she said the city now is obligated to pay $2 million a year in police and fire pensions “and this number is only increasing.”
In his own memo to Mayor Mike Chamberlain and aldermen, Sanderson stated he thought the utility tax should be spent only on what it originally was intended for, now that video gaming establishments are contributing (about $144,000 a year) to the tax base and Chrysler no longer is closed.
Should his proposal be approved, he said some of that money could be used in an emergency, with approval by a super majority of the city council.
“At this point I don’t see this (proposal) as being viable,” Alderman Dan Snow said.
City rate-payers never approved the tax,” Alderman Clint Morris said. “To me it’s important to have an accounting of the money.”
However, Mayor Chamberlain said there has been accountability.
“We have made necessary alterations based on the economic conditions,” he said.

 
 
 
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