Bloomington raises taxes to decrease deficit

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Alex Stogin, Staff Writer

 

For the past few weeks leading up to Bloomington’s latest City Council Meeting on Sept. 21, threats of budget cuts and tax increases loomed over citizens like a dark, terrifying cloud.

With the council voting 7-2 to approve a one percent sales tax increase, the clouds have parted, but not everyone feels that those clouds were replaced with sunny skies.

“Our taxes are going to go up tonight, I’m guessing. And I understand that,” Bloomington resident Sue Feltcamp said. “All I’m asking is: please, when you take my taxes that I work hard for, please be responsible when you spend the money, and let us know where it goes.”

Alderman Scott Black presented next, walking the council through the conclusions that the budget task force had drawn. After much debate and discussion, the council voted to increase the city sales tax from 7.75 percent to 8.75 percent, which is expected to help Bloomington’s current deficit.

The increase is not expected to be substantial enough to wipe out the deficit entirely, which Aldermen David Sage and Mboka MWilambwe were quick to point out. Sage said that cuts would be necessary to supplement the tax increase.

“I’m struggling with feeling a high level of confidence that we’re going to be able to make any cuts in the FY-17 budget,” Sage said. “I need to hear from the council, definitively, that we are committed to making FY-17 cuts.”

Sage’s comments echoed a larger concern – the purpose and merit of the sales tax increase. The proposal for the tax increase was definitively one percent, but Sage, MWilambwe and others expressed concern over the disbursement of the funds it would generate.

Per the proposal, .25 percent of the tax increase would go towards assisting mental health, another .25 percent would go towards street resurfacing and the last .50 percent was designated only towards the general fund, with no specific earmark.

Sage proposed that they pass the .50 percent designated towards mental health and street repair but advocated that the council postpone the vote on the rest until they had a more specific purpose in mind.

On Sept. 9, the council of Normal voted to institute an identical one percent sales tax, but its approval was dependent on Bloomington’s decision to follow suit. Their decision cast a latent pressure on the Bloomington council.

“I recognize that I work with the city of Normal, but I don’t work for Normal” Sage said. “I think it’s important that we have an opportunity to have a full conversation.”

Alderman Black said that the tax increase was necessary, and he expressed concern that the council would not be able to effectively approve any budgetary cuts. He mentioned many examples when the board has not followed through on the “tough decision” to make cuts. “I’d love to entertain some of your ideas for cuts,” he said. “At no point have we ever identified a key program that we are able to live without.”

“I don’t think we have the stomach for it,” Black said.

Ultimately, the sales tax increase passed, demonstrating the council’s concern about the looming deficit. With a two percent increase in costs each year and a flat revenue, the city’s deficit would immediately and substantially expand.

While the tax increase might not have satisfied everyone in attendance or everyone in the city of Bloomington, the tax increase’s purpose is to at least keep the deficit at bay while the council engages in further discussion about budgetary cuts.

“The current deficit is around seven million and with this increase it would give us about five million to reduce the deficit,” said Steve Rasmussen, Assistant City Manager of Bloomington.