Last week, while perusing Halfway Interesting, I came across Eric Bussell’s reflection on last Tuesday’s City Council Meeting wherein the council struck down Karen Foster’s proposed 4% tax on package liquor. Council opposition was overwhelming, as the bill did not receive a single vote — even Foster reversed her position, citing the outpouring of concern she heard from local business owners. In his short article, Bussell comments: “with zero organized effort against tax hikes, and plenty of community activists who want tax hikes, it makes me think that this is going to be a very interesting few years on the Champaign City Council.”
But interesting doesn’t quite seem to cover it. It was, as Eric suggests, sublime to see organic democracy in motion, but at the end of the meeting, our budget remained underfunded, and I was left with a question: why are we so apprehensive to instate taxes that impact local businesses?
As it stands, there’s no great way to cut ourselves out of this shortfall. We’ve lived and thrived in this town with relatively low taxes for years, but as we winnow away at the so-called fat in our budget, we need to be careful to leave the flesh intact. The question of whether or not to raise revenue is a false choice that we’ve been offered by those who dogmatically cling to the notion that we should always look to lower taxes, regardless of the city’s financial condition. If we’re committed to keeping Champaign an attractive place to live and do business, we need to stop asking if we need to raise revenue, and start asking how we’re going to raise revenue.
If the business community and the council have decided that a 4% tax on package liquor isn’t fair, it’s their job to find another way to raise revenue that respects the fact that small businesses benefit, perhaps even more than private citizens, from the services the city provides.
Lean Cuts
Just prior to voting down the package liquor hike, Marci Dodds suggested that talk of further spending cuts may not be so feasible when she said that, in the future, the council may only be able to find “lean cuts.”
What is a “lean cut,” exactly?
Well, we can’t be sure actually. As Eric mentions in the comment exchange following his article, the council does not provide complete transparency; therefore, we as a citizens don’t have the same access to city documents as the citizens of many other towns.
With that said, I think it’s fair to assume that a lean cut is one you make after slashing over 30 city jobs (31.7 Full Time Equivalent positions to be exact) last year. A lean cut is the kind you make after you see revenue drop due to increased pension costs despite a recent increase in property taxes. A lean cut is the kind you make after delaying infrastructure updates and re-routing thousands of dollars from various other funds back into our general fund so we can pay our bills.
More specifically, a lean cut, I think, is the kind you make after having shaved away all the fat, the membrane, and the sinews, leaving only flesh — things like capital improvements, library services, law enforcement, fire services, and so on.
The 4% increase that the council voted down was proposed to avoid one of those lean cuts: the 2.9 FTE needed to keep the front desk at the police station fully staffed 24 hours a day. You may remember that particular issue from a few months ago. It seemed to come up often during the mayoral campaign and it has since become a metonym for the services we will lose if we don’t raise revenue on the double-quick.
Some on the previous council seemed content to do away with the positions needed to keep an overnight staff at CPD’s front desk — now that the public has spoken, the council has changed its rhetoric, but as of yet, not much else.
The Cost
Nobody likes to pay taxes. Businesses especially don’t, and understandably so. Local businesses not only provide much needed services to the community, but they also support the livelihoods of their employees who, in turn, go out and contribute to the local economy. So why should we instate taxes that may adversely impact businesses?
Well, because, despite being a very important part of our economy, local businesses didn’t choose to put up shop in Champaign because we here are a bunch of nice, well-meaning folks. Even more than the local customer base, the reason Champaign is a nice place to do business is largely due to the massive influx of out-of-town cash that flows through our city each year. It bears mentioning that the money that flows into Champaign from the suburbs also goes to support our region’s three biggest employers (U of I, Carle, and Provena). The jobs that these employers create are a windfall for local businesses, as they consistently produce local consumers despite the larger economic conditions the nation is currently dealing with.
We don’t have the university because of our awesome business community; we have the university because the state funds it, and while local businesses aren’t the only beneficiary of the economically conducive environment it creates, they benefit immeasurably from its presence. They also benefit from the relative safety and convenience provided by the tax dollars we chip in to pay for things like police desks and business district corridors.
As a city, we’ve cut jobs, deferred debt, and re-routed funds. We’ve put off capital improvements costing more than $150,000, setting back our ten-year improvement plan. All of these are reasonable measures, and yet they’re not enough. We still need to pay our employees — and yes, the 2% pay increase that was passed the past Tuesday is part of our obligation to a city staff that has to grapple with an increased cost of living each year.
A 4% increase in package liquor may not be the solution here — I’ll buy that — but we can’t stop there. However the council decides to address our shortfall, it’s only fair that local business be a part of the solution.
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End note:
After reading the city’s budget (PDF), I found that one of the increased costs that the city is dealing with is the “increased demand on record retention brought by the State requirements in the Freedom of Information Act and Federal rules for e-discovery.” The report goes on to state that “City staff will evaluate available software and recommend purchase of a new email system that will meet those requirements with minimal manual effort. This is a one-time funding need of $70,000 and a recurring need for maintenance support of $3,000.”
If we are getting ready to drop $70K on new software that helps us meet state requirements for transparancy, why not invest in a transparency portal like the one Eric mentions in our comment exchange? Seriously, folks, is that reasonable or am I crazy?