Public Hearing City of Champaign Proposed Tax Rate Increase Nov.6

Champaign City Building,102 N. Neil, C. Council Chamber 7pm On Tuesday, Nov. 6th, 2007, the Champaign City Council agenda includes a public hearing on the proposed tax levy which determines the property tax rate for the City of Champaign. This is our opportunity to attend and speak up against the proposed tax rate increase. Please attend and voice your opinions as well as write our council members and mayor. I have included Ken Pirok's letter regarding the proposed increase and talking points. There is still an opportunity to keep the tax rate the same, if we show up and speak up. This will effect property owners and tenants alike. Please forward to your neighbors and friends. Here's the letter from Ken Pirok - City Council explaining the data and report showing that if the rate is not raised, we will still have a yearly excess until 2014 - 6 years - a long time. Last night, the Champaign City Council tentatively approved a property tax hike. I favor keeping Champaign's property tax steady at the same $1.2659 per hundred dollars of valuation used last year. I won't bother to discuss the affordability of property taxes or how property values (and therefore taxes) have been increasing more rapidly than inflation; those arguments are well-documented. Instead, let's concentrate on what property tax revenues mean to the city. During the staff presentation, Richard Schnuer, Champaign's Finance Director, showed a line graph of the major components of the property tax levy: library, pensions, capital improvements, and the General Fund. These lines were stacked on top of each other, and each increased over time due to the expected growing obligations of the city. He added a blue line, which was called "additional." This represented the amount left over, or in some years, the amount that we were short. Even at the same $1.2659 tax rate as last year, the blue line was above zero. Next year, over $800,000 would be left over after fulfilling our obligations. The following year, the city would have even more "additional" funds available. In fact, the line remained positive, implying that we would have excess available, until 2014. Some have suggested that, if you don't want to increase the property tax rate, then you must suggest which services you would be willing to cut to meet the shortfall. The truth is that the shortfall doesn't exist. Additional funds are available at the current rate. Now, the city will have some extra needs in the future, which include repairing arterial streets, catching up on pension obligations, improving the Public Works facility, and moving/adding fire stations. We should use the extra money to fund items like these-true long-term investments. And, who knows what will happen in a few years, or by 2014 when the blue line finally crosses and becomes a shortfall? It's just as likely that we'll be better off than we are projecting and that we will be able to afford some of these projects with existing revenues at current rates. Some have suggested that those extra funding needs are new, that we didn't know about them last year, and that we need a property tax hike to pay for them. This is nonsense. We knew about every single one of those items last year when we voted on the tax levy. In fact, I remember learning about the needs for the Public Works facility all the way back six years ago when I was receiving my City Council orientation. Each project is necessary, but they may not need to be as costly as is being predicted, and they certainly aren't required to be funded by property taxes anyway. Property tax is often a bad choice, because it is one of the most expensive and regressive types of tax. We have other options. So, last night, I initially voted for the $1.2659 rate, which I favor maintaining. Unfortunately, the only other Council Member to agree with me was Karen Foster. After a series of polls on specific tax rates, no rate received the five necessary votes. Karen and I eventually voted for a compromise rate of $1.2942. This was obviously our second choice, but it became clear that the other Council Members were intent on increasing our tax rate. I think the compromise was necessary to avoid the even worse alternative of $1.312 that was proposed by staff and could have passed. Property taxes are going up. But, it could have been worse. Ken Pirok Champaign City Council-District 5 Talking Points It appears local elected officials think their role is, to oversee the expansion of local government rather than the management of local government. We elected them to oversee the management of local government. We elect them to be our voices - to represent the citizenry to the institution, not the institution to the citizens. There will be an excess until at least 2014 at the current rate of $1.2659. We will still be able to meet our obligations, There is no shortfall and no services need to be cut. Additional funds are available at the current rate. Other viable means of funding projects such as repairing arterial streets, pension obligations, improving the public works facility, adding/moving fire stations and the likes should be evaluated and considered. As Ken states. they are not required to be funded by property taxes. Property tax is oft a bad choice as stated as it is one of the most expensive and regressive types of tax. They are other options. To give the city this titanic increase of excessive funds allows them to spend with out accountability to use of funds and not have to demonstrate the need and justification of doing so on an ongoing basis.. They do not have to prioritize within reasonable budget constraints. It's a blank check. Once the camels' noses are in the tent - it's hard to get them out. "We are seeing tax cuts at the federal, state and local level in a lot of other places, but not here in Illinois," said J. Thomas Johnson, president of the Taxpayers' Federation of Illinois. "There seems to be no coordination of governments taxing the same people or prioritization of what's important," Johnson said. "Each government seems to be operating totally independent of each other even though they're asking for tax dollars from largely the same group of people." This tax proposal stand out both because of its titanic dimensions and because its not in sync with any national trends. A family might delay the purchase of a new car or a new roof if money is tight or not in generous oversupply., but the city appears to opposes such an approach when it comes to city government. There is contention that the city would lose momentum if it interrupted its investment in infrastructure, and argues that delaying projects only means they would be more expensive to build later. Yes, it can be more expensive to to build later yet revenues will continue to rise to help meet those future costs - the basis for expanding development and growth. Just like it's taxpayers, the city may have to wait until it's revenues have increased proportionately due to growth in assessments, growth in development and growth in our local economy. We may need to wait until previously granted local tax incentives such as property tax abatement, sales tax exemptions expire and thus begin to increase the till instead of increasing the burden on property owners now. If we can not afford to fund our city's needs without passing along an disproportionate cost to the residential taxpayers of our city; we may also need to re-evaluate the granting of these incentives. A grass roots movement is in order. The resounding comment I heard Tuesday night from council members was that while a number of folks emailed input, only 6 members of the public attended the study session - and only three spoke up. So maybe the taxpayers didn't feel that strongly about this issue. Of course, the real story - we already have and will have an excess at the current rate of $1.2659 until at least 2014 wasn't made public until Tuesday night. Hard to argue the facts when you don't have all the facts. Paramount is having large numbers of taxpayers be able to dialogue the true state of the issue and voice not only through emails and phone calls but in person when the cameras are rolling. If you are are tenant, such an increase most likely will affect your rent as additional costs of ownership are passed on to tenants. Ken's point that " the affordability of property taxes or how property values (and therefore taxes) have been increasing more rapidly than inflation; those arguments are well-documented. Instead, let's concentrate on what property tax revenues mean to the city." is important to keep in mind as they just don't see this as part of the equation - a separate issue. The inequitable tax assessments in our city are also not seen as a part of the issue of tax rate at hand. While the other big elephant in the room - a separate fight. We care about the fiscal soundness of our city while protecting our interests and pocketbooks. I appreciate and welcome you assistance, guidance and input in getting the word out. Let's do it! grazie, Debby Auble