THE JOURNAL & TOPICS NEWSPAPERS | WEDNESDAY, APRIL 5, 2006
Tax Hikes OKd, But Not Without Debate
By DWIGHT ESAU
Journal Reporter
There is a cliche that says nothing is as certain as death and taxes.
In Park Ridge, that phrase is being modified to say, "What is certain are tax increases."
It took more than an hour of discussion and some negative input from some aldermen and a few residents, but aldermen approved Monday night (Apr. 3) one new tax and increases in five other taxes and fees, to increase revenues and bring its 2006-07 budget closer to balance.
The actions grew out of the budget planning process, in which it was revealed that the city's general fund would be more than $1.1 million in deficit unless significant cuts were made and/or revenues were improved.
City officials chose to focus on the revenue side. But the actions weren't totally unanimous.
Proposals for modest increases in all vehicle license fees (ranging from $25 for motorcycles to $120 for large trucks), in the animal license fee, the livery vehicle license, and a change in the taxi subsidy designed to reduce costs, sailed through the council with unanimous support.
But proposals to increase the city's gasoline tax from one cent a gallon to three cents, and a new sewer tax based primarily on water usage, sparked some lively discussion. They were approved, by a majority of the council, however.
Several aldermen objected to the gasoline increase, saying it would drive customers away from city service stations and anger station operators. Station owners would not have to pay higher taxes to the state, because the tax increases are passed directly on to consumers. But some said the owners would simply lose business when motorists drove to other communities looking for cheaper gas.
The tax is intended to generate about $235,000 additional for the general fund.
"This tax will bring us less revenue, an motorists and gas station owners will object, in this day of $3-per-gallon gasoline,." said Ald. Rex Parker. It's the wrong tax at the wrong time."
"I drove in the Park Ridge area looking for cheap gas the other day, and I found an 18-cent-per-gallon difference between the high and low rate," countered Ald. Jeff Cox. "A two-cents per gallon hike is minimal compared to that. It will hardly make a difference, but it will to our budget. People in Park Ridge are willing to pay more, because they live in an affluent community."
After an amendment by Ald. Rich DiPietro to cut the increase to two cents instead of three was defeated by an 8-6 vote, the vote to approve the gasoline tax was 10-4, with Ald. Kim Jones, Parker, Frank Wsol and Mary Ryan voting no.
Then it was on to a proposed new sewer tax, which will be a flat 45 cents for the first 5,000 gallons of water usage, seven cents-per-gallon for 5,000-30,000 gallons, and eight cents per gallon for usages over 30,000 gallons.
The issue here was how to allocate the estimated $100,000 in additional proceeds in the first year. Ald. Wsol moved to amend the proposal to specifically direct the proceeds to relief sewer construction and maintenance in amounts above the $510,400 already budgeted for 2006-07.
"If we are going to tax sewers, we should spend the money for sewers, and not just put it into the general fund where it can be directed at anything," Wsol said.
"I'm opposed to this tax, because it is put on the backs of homeowners, this tax is a slippery slope that will just generate more taxes in the next 5-10 years," said Parker. "Why don't we concentrate more on federal grants?"
Wsol's amendment was defeated by a vote of 12-2 after many aldermen argued that these tax increases are designed to benefit the general fund, which is the main city fund in danger of deficit. They also said this council should not tie the hands of future councils regarding the allocation of taxes. "We need to direct these proceeds to the places where there is the greatest needs, and those needs will change," said one alderman.
The vote to approve the sewer taxes was 11-3, with Parker, James Radermacher, and Wsol voting no.
Resident Ken Balaskovits was sharply critical of the entire tax-increase package, saying they were not discussed thoroughly enough in the budget process and weren't based on sufficiently solid analysis and thought.
Resident Pat Livensparger said she was "concerned" that aldermen were approving taxes without any accountability regarding where the funds will be used.
The city's budget, with these taxes now in place, is expected to total approximately $43 million and is expected to be approved later this month.