FeedCouncil getting things right for a change with new budget process
May 10, 2006 in Local
I attended most of the Peoria City Council’s “brainstorming” session about the upcoming 2007 budget. There were a ton of good ideas presented. The reality is, however, that pensions and health care costs continue to rise, thanks to new rules the state and federal government oh so nonchalantly pass along to cities. One item that didn’t get mentioned in Jennifer Davis’ too-brief wrap up is the idea that the city needs to reduce health care and pension costs. At large council member Eric Turner suggested that the city create a “head count cap,” which would help keep insurance and health care costs down. Second district member Barbara Van Auken suggested that city has been gtiving employees a “Cadillac” health care plan, when a less expansive “Buick” plan would be more appropriate. I agree. I pay for 20 percent of my helth care premium, why should I pay 100 percent of a firefighter, police officer or other city worker.
Two ideas were especially exciting.
First, City Manager Randy Oliver mentioned a “fire service fee” than some municipalities were using to shift the burden for paying certain services away from those who already pay property taxes. As I understand it, a fire service fee would be charged to any and all property owners, regardless of whether the owner if a not-for-profit entity. Right now, the costs associated with fire fighting and prevention are funded through property taxes. But organizations that receive fire protection services like colleges and universities, charities, churches, hospitals, etc., are exempt from property taxes. Mayor Jim Ardis, Van Auken and others mentioned that would favor seeing a “public safety fee” instead that could be used to help fund police and fire. There’s some question about how much of this is allowed by Illinois law and whether a public safety fee could appear as an item of property tax bills.
This could be used to generate the revenue needed to eliminate the regressive “garbage fee” that appears on residents’ water bills that go to fund a handful of additional police officers. As the exact rate of this new fee is determined, a corresponding decision would be made as to how much to lower the property tax rate going to police and fire. In other words, a shift in the burden away from property tax payers toward whose who have been getting this service free of charge. Hopefully, these rates would be set at a point that would generated enough money to fully fund a fire engine company at Fire Station 11, eliminating a serious gap in the safety net in the heart of Peoria, and providing the police with enough additional manpower to adequately fight crime. I’m sorry folks, but there are NOT enough police fighting crime on the streets. I hear too many complaints about having to wait and about police being to busy to handle anything but murders and shooting.
Second, 1st District Council member Clyde Gulley said he would like to see a massive urban renewal program similar to Southtown. Well, that’s not going to happen. But several members, including Van Auken and 3rd District member Bob Manning want to see some sort of tax incentive to encourage the middle class to stay in Peoria. Van Auken described it as something similar to a “TIF” district for homeowners. Manning says there should be a cap on property tax increases in these areas, so what when someone buys a older home in a troubled neighborhood and fixes it up, they won’t be punished by a higher property tax bill because the assessor has decided it’s worth more.
Long-time readers know how much I hate TIF districts. They invariably give one business an advantage over another, they interfere with the free market and the make it difficult for property tax dependent school districts to support themselves.
This idea is different. Young working class families are moving out of the inner city. That’s a given. These older homes are being bought by slum lords and rented out to anyone who can pay cash, no questions asked. These kinds of places lower in value and cause the surrounding property to lower in value as well. Giving a working class family a seven-year-long tax freeze for fixing up a home they buy in a distressed neighborhood doesn’t take money away from schools because those schools weren’t going to see an increase in property taxes from that property anyway.
I would limit these “residential TIFs” to neighborhoods south of McClure Avenue.
Mayor Ardis brought up the “Austin Plan,” something he mentioned to me back when he was running for mayor a year ago. For years, the city’s economic development process was reactive. If a developer came knocking on the door with a scheme calling for some sort of incentive or the use of eminent domain, the city decided whether or not it wanted to go along. When the city of Austin, Texas, has been doing (as I recall) is maintaining a comprehensive plan showing what specific kinds of development is needed in specific areas. The city made it known that help might be available for economic development projects, provided the meet the needs specified.
I am not a fan of using taxpayer money — city, state or federal — to help developers compete against existing businesses. Nor am I in favor of using eminent domain laws to buy our homeowners to help a millionaire get what he wants. I’m in favor of the Austin Plan, as long as it doesn’t do any of these things.
Fifth District City Council member Pat Nichting wants the city to automate its many parking decks, and save on labor costs. At large member Gary Sandberg wants to start charging market rates for parking, and stop undercutting private decks, as well as make those paying to use them pay for the decks instead of the people who never park downtown. John Morris wants to make the entire city walkable ( laudable notion, but I’d settle for making all new development comply with the principles of New Urbanism).
Nichting urged the council to pay for improvements to major thoroughfares, which would make it easier for fifth district residents to get to and from work. Van Auken, disagreed, saying there needs to be a halt to ride widening projects for at least a few years. Wide streets with heavy traffic make the inner city unlivable, she said I agree. If people don’t want a long commute to work, let them buy a home south of War Drive (or even Glen Avenue) and stop bitching about the drive. I have not one lick of sympathy for suburbanites who spend too much of their lives in a car.
Manning wants the city to invest in the technology that he says will make city workers more efficient. 4th District Council member Bill Spears challenged the city administration to name a case in which new technology actually made it possible to reduce personnel. No such example was stated. Spears also made his annual plea for funds to repair the screwed up storm water drainage system in his district. Much laughter ensued.
At large council member George Jacob, who attended via voice conferencing, suggested funding for improving the southern corridor gateway into Peoria — along U.S. 24/Washington Street — as well as an additional emphasis on economic development. Jacob had a hard time hearing several council members, especially Nichting. Sandberg assured Jacob he wasn’t missing much. Again, much laughter ensued. At large council member Chuck Greyeb didn’t attend, thereby sparing us all a lecture about how Peoria’s workers were the smartest and most-hard-working in all the world, and that denying them anything they wanted was bad for moral and would lead to a mass exodus of disgruntled city employees.
And I just like the idea of the city council — the ones elected by the people to set policy — actually setting budget policy for a change, instead of responding to the budget the staff decided among themselves to create. The council will take the list generated here and actually rank them in order or priority, and the actual budget their receive will be based on this. Presumably, the could won’t be opening up a proposed budget document four months from now and seeing a proposed property tax increase or special spending they had no idea was coming.
I could tell from their body language that some staffers don’t like this one damn bit. Good.
May 10th, 2006 at 12:02 pm
Excellent summary Bill. I almost feel like I was there (thankfully I wasn’t)! This is the type of value-added reporting that I hoped to find on your site. Keep this up and you will be able to show that you truly want the blog to be “An independent online journal of news and opinion” with more emphasis on news rather than opinion. While we all have opinions, they really aren’t worth much without some level of facts to support them.
Now for my two cents regading the substance of the discussions:
1) Fire Service Fee: Great conceptually - devil’s in the details. I’m okay with shifting part of the burden to non-profits that don’t currently pay for property taxes. They use these services and should pay a reasonable amount towards them. However, my concern is that in enacting this “new fee”, the average property owner is going to end up paying more unless property taxes are reduced at an appropriate level. The problem is not only does the city need to cover the amount currently generated by property taxes for police and fire but also enough to cover the $2.5 M generated by the garbage fee (although not all of that $2.5 goes toward public safety - a portion (at least originally) covered litter programs and other miscellaneous programs. In concept, I could support the approach but only IF the property tax reduction is equal to the fire service fee I’d be paying. Not sure if there are enough non-profits out there to make the math work.
The other caution I’d make is that if we peg the cost of Fire & Police services to a public safety fee, we should expect increases in that fee every year since payroll, pension, and healthcare costs increase annually. While the Council has been great about not increasing property taxes, can they hold the line on the Public Safety Fee and if they do, where will the additional annual amounts come from?
But kudos to them for starting to think outside the box on financing issues.
2) “Residential TIF” or whatever you want to call it. Again, nice to see them talking about ways to help older neighborhoods. But we need to keep in mind that every dollar they “divert” from one homeowner will need to be paid by another homeowner in the City in order to keep the revenue stream balanced. So we may simply be shifting who pays (which depending upon an individual’s viewpoint could be bad or good).
3) Councilman Sandberg’s plan to charge market rate on parking. Let’s try it for a year and see what happens. I’d still favor going one step further and actually selling one or more of the parking decks. Let’s let the private sector have the whole thing.
4) More road in 5th District? Don’t know what to think…not enough details for me to make a decision. If he means extending Pioneer Parkway, I’d say nah…..there are plenty of other roads needing improvement before we tackle that big a project. However much you don’t like “suburbanites who spend too much of their lives in a car” let’s keep in mind three things: (1) they aren’t suburbanites…they are city residents; and (2) they pay the lion’s share of property taxes which fund the essential services of the city; and (3) they may be paying additional taxes to fund the residential TIF program so let’s not make them out to be the demons here.
5) I agree it’s good to see the Council talking about policy direction….time will tell if they will actually progress to “setting policy”. Talk is easy….action harder. That’s why so many politican’s disappoint their constituencies after getting election.
May 10th, 2006 at 1:18 pm
Bill, I really don’t think property tax freezes are going to be much of an incentive. If you polled North Peorians as to why they don’t live south of McClure, I bet not one of them would say, “because the property taxes are too high.” I appreciate that Manning and Van Auken are trying to come up with incentives to live in their districts, but I’m sure they would agree that the things that keep people out of the older neighborhoods are schools and crime. Until those problems are addressed, I think property tax freezes will yield little result.
May 10th, 2006 at 2:58 pm
I’ll have to say i agree with that so some extent. But why should there be a disincentive to those who MIGHT be disinclined to fix up a house because their tax bill will go up?
It’s going to take a lot of changes to get the middle class back to peoria. We can’t dismiss any one idea because all by itself it won’t work.
May 10th, 2006 at 3:52 pm
I’ve said it before and I’ll say it again, some of these houses are too far gone to be “cleaned-up” and just need to go.
I drove through my old neighborhood several times a week. It seems there is always another delapidated/boarded-up/burnt-out home.
Where would the loss be if these got torn down? Some entire blocks could come down. Instead of 12 or 14 trashy houses, build 6 nice home with spacious yards. THAT is Urban Renewal.
May 10th, 2006 at 4:04 pm
Will all pay? District #150, Civic Center,PHA,Citylink,PPD,State of Illinois, Springdale Cem? County Court House? All recieve services from the PFD and are required to staff and equip to protect all of them. if all are expected to pay up then all should pay reguardless if they are not for profit or anything else. The PFD bills now for services for out of town people that get services and bill for Haz-Mat related calls. also collects a fee for Haz-Mat permits. Do All Haz-Mat item holders pay now? If someone does not pay the fees will the PFD refuse to respond? Let fires burn and people die?
May 10th, 2006 at 5:38 pm
Martin: They are not talking about instituting a subscription-funded fire department. Yes, they do exist and some towns, mainly down south, have them. You get a sign or placard that says you are a member, and the fire dept responds only to members. What the COP is talking about is just a service fee. It would be collected on the property tax bill like the taxes you are currently paying to PFD are. If you are in default, the COP would handle it just like it would if you stopped paying your property taxes. There would not be any change for most people. The big thing is now the non-profits would be paying.
In concept this sounds like a good idea. If funding the PFD is a problem, make all who benefit from it being there pay.
Something tells me that the COP would squander the new-found revenue just like they do with everything else.
May 10th, 2006 at 5:55 pm
the fee idea sounds good on the surface but remember who funds those places — you and me and all of us at our hospitals, churches, foundations, etc.
the best defense is to control costs otherwise it’s just a shell game.
good summary about technology not getting rid of staff. too funny.
I agree with CJ that crime and schools are the major reasons people leave the Heart of Peoria. A break on property tax would be nice but if the schools still suck, why stay?
May 10th, 2006 at 7:34 pm
Bill,
I can appreciate your work on your blog, however you might want to check out if all city employees have 100 percent covered health care, I believe you are wrong on this one.
May 10th, 2006 at 8:01 pm
I’ll help you out a bit Bill on the health insurance issue. I think City employees pay 10% of their premium. Not much but something. National standard is more like 20 to 30% paid by employees. Often times even more of the family coverage. But the real issue, which Council Member Van Auken raised is not how much they pay, but what level of coverage they are given. Paying 10% of a Cadillac plan is better for the employee than having 100% of an Chevy Plan covered by the employer. Health care is complicated and it’s not how much they pay for the premium but what is covered and not covered.
I have to agree with Tony. However services are funded (no matter how rationally and fair it’s designed to be) doesn’t matter if the money is squandered. New revenue brings with it an uncontrollable desire to spend more. While I think highly of many government employees, that temptation is just too great to resist. Hell, looking at your notes on the Council budget goal setting meeting, many of them are already thinking of new programs and ways to spend money that they haven’t even collected yet.
I think I’d rather have my property taxes increase and eliminate all other fees/charges/taxes so that I can at least directly understand what I’m paying and have a better chance at holding politicians accountable. It’s hard to get too excited when you’re nickled and dimes (a few pennies for sales tax each day, a few pennies of local gas tax each tankful, a dollars a month for garbage service, a tax on the utility bill, a local tax on the telephone bill, etc.) After a while you just pay the damn things and don’t think about it.
May 10th, 2006 at 9:50 pm
I believe city employees pay 10% plus a co-pay and a yearly deductable for medical and dental coverage with no optical coverage. A couple months ago there was a study done if you remember that said for government employees Peoria was right in the middle of the state wide municipalities for health insurance. In fact some municipalities do not even charge single people for health coverage, while the city still charges them 10%. Also, each of the council members I believe is covered by the cities health coverage. And I agree with Peo Proud I wish everything was covered on the property tax bill which I have mine handy and of which only 11.35% goes towards city of peoria, this includes your police, fire, and all other city services excluding the library. At least if it is one a property tax bill it is deductable on your federal income taxes and you can get a percentage of it back. The problem with the real estate tax is Dist 150 is charging 53.9% of my bill and still are in a deficit. For those of you who say the city is overspending I think you need to look at where the real waste in the property tax money is and that is at District 150.
May 10th, 2006 at 10:00 pm
I’ll have to check, but I recall being told by someone on the council that it is 100 percent coverage for at least one bargaining unit.
May 11th, 2006 at 2:09 am
Well, first thing to learn is always double-check what any councilmember tells you.
While they are in positions of power, they don’t always have their facts straight- surprise, they are human too!
May 11th, 2006 at 2:17 pm
UPDATE: From Randy Oliver, Peoria City Manager: “Employees on average pay 10% of the cost, however, the exact amount depends on type of coverage (single, single + 1 or family) and level of compensation. More highly compensated individuals pay more.”
Therefore, I got my facts wrong. My apologies.
May 11th, 2006 at 7:20 pm
I think that property tax freezes will go a long way towards promoting growth in the older areas. Why would I buy an older house in the Uplands and pay 6000 a year in property taxes and most likely private school in addition to renovations that are always a yearly expense in the older homes. I could buy a nice size house in Germantown at those prices, a freeze would be a nice incentive. If that is too hard to swallow how about a freeze for anyone that buys a home that was a rental and actually lives in it, no tax increases as long as they do, that might go a long way towards reducing the landlord problem.
May 11th, 2006 at 10:49 pm
$6000 a year is property taxes in the Uplands? mmm no…
My bill is $2747.
May 11th, 2006 at 10:53 pm
If they can afford to move to Dunlap… they can afford the increased assessment that may come from fixing stuff up.
We’ve poured about $20 grand into our house already… the increased assessment is hardly going to break us. In three years our assessed value went up 20%, the taxes and fees went up 23% but that only translates into $518 more. For someone living in a less affluent area that might only amount to a third of that or even less.
Today, you can get tax breaks on your property, depending on what you fix up (the term used for that eludes me atm). You need to talk to County to find out what qualifies and what doesn’t. When we first moved to Peoria, the house we bought had a deduction for an improvement on the garage. That deduction lasted several years. There is nothing stopping us from doing more improvements and getting more deductions…
May 12th, 2006 at 6:41 am
Tom,
First off, you won’t pay $6000 in taxes in the Uplands. Second, if you moved here, why send your kid to a private school. The primary school is Whittier, who received a Blue Ribbon award last year. One of nine in the stae. Where are you going to find that in Dunlap or Germantown? The middle school is Calvin Coolidge which we’ve heard nothing but good about. The kids from Whittier are going to Calvin with low enrollment and their involved parents.
May 12th, 2006 at 7:43 am
And where will these kiddies go to high school??
May 12th, 2006 at 7:54 am
What are the taxes on the homes in this map?
http://www.zillow.com/search/S.....ode=browse
May 12th, 2006 at 9:18 am
My taxes in the Uplands are 4300 and there are at least 3 houses on my street that have tax bills over 7000 and there are a few more at 5800 as well as at least one on Columbia Terrace that is over 6000. Sales have been brisk and prices high as of late so the 6000 tax bill will be a very common number shortly for many of the larger homes in the uplands. The that may consider moving to this part of town from Metamora or Dunlap are more than likely going to be looking at the homes with the higher taxes. My taxes were 1800 when I moved in 8 years ago before the homes around me started to sell for higher and higher prices.
May 12th, 2006 at 10:20 am
Most of the homes in the Uplands are in the $100,000-$140,000 range and thus would not be paying that much in taxes.
May 12th, 2006 at 10:46 am
It will be an interesting next couple of years in the uplands area as far as tax bills are concerned. I am not sure how the county does the increases, if they use recent sales of nearby homes as a guide or not. I wonder what all the high dollar sales of homes near the fieldhouse to Bradley will do to the calculations for taxes. I know that when the homes near me doubled in price my taxes soon followed.
May 12th, 2006 at 12:51 pm
On an individual level, I am sure some folks are wincing at the increasing value and the taxes on their homes, but that is a GOOD thing. Rising values show that we are not an area in decline. Granted the Uplands may be an island oasis. Rising homes values are a more certain way to clear the area of the riff raff than even the police. Riff raff cant afford the expensive homes or the rent that goes along with expensive homes. We need to see a dramatic increase in home values in other parts of the west bluff and east bluff. Looking for ways to ease \’the pain\’ seems counter productive to me.