Some city council members stated they did not want to be all “doom and gloom” when discussing the city’s tax levy Dec. 16.


Some city council members stated they did not want to be all “doom and gloom” when discussing the city’s tax levy Dec. 16.

City commissioner Dan Decker said the Downtown 2010 project offers possibilities and one way to help keep residents’ property taxes down.

But, until anything is built for the new downtown to bring more revenue to the city, council members had a tough decision to make.

The council debated about the levy for two-and-a-half hours with input from the audience.
There were 10 options, and the council adopted option 10, a 5.7 percent increase over last year. This will equate to the city receiving about $5 million in property taxes, compared to $4.7 million in 2007.

The option chosen shows a tax extension of $5,040,563, an increase of $274,046 over last year. The tax rate per $100 of assessed valuation is $1.19 compared to $1.21 last year.
A homeowner of a $150,000 home would pay $623.77 up from $608.32 last year.

Originally, city staff recommended a higher tax extension of $5.2 million, which would have resulted in $433,753 more for the city. That tax rate equaled $1.23 per $100 of assessed valuation. This increase represented 9.1 percent.

The city has about $10 million in new property, enterprise abatements and annexations that will be added to the tax rolls this year.

The city’s portion of the property tax equals 15 percent of all taxing bodies.

City administrator Tom Brimberry said the city’s assessed value has grown steadily since 1992, and the sales tax has grown significantly. Sales tax is the city’s largest revenue producer.
Gaming peaked in 2002 and is now holding at $3.5 million per year in taxes the city receives. Gaming dollars are mainly used on street paving, Brimberry said, adding that $1.4 million was used for streets this year.

Prior to the vote
Densberger said he predicts retail sales will be down. A figure provided by the county showed the non-home rule sales tax is down 2.25 percent for October, he added.

“I believe our economy is about to hit some tough times,” Densberger said, adding he expects a shortfall of $340,000 for the city between declining sales tax and gaming tax.

While Densberger agreed that property taxes are too high, he said the city council should maximize on property tax to make up for the shortfall.

Densberger said he lives in an average home and pays $3,900 in property taxes.
“Property taxes may be higher than other communities, but there’s value proposition here,” Densberger said.

For example, he said other town’s residents pay separate garbage service outside of their tax bills. He also added that other towns have volunteer fire departments. He also said the city’s water and sewer are top quality.

“Citizens of East Peoria do have some top-notch services,” he said.

Decker said while other cities are criticized for their snow removal efforts, East Peoria is not.
Decker said he is concerned if they did not choose a higher tax option, they will not be able to maintain the city’s services.

Even if the city passed the highest property tax option, Decker said he still thinks they will have to dip into their reserves, which he does not want to do.

“Maybe it’s a rainy day,” he said. “It’s my responsibility to make sure the city has enough money to meet its needs,” Decker said.

Commissioner Tim Jeffers said in talking about the 10 different tax options, they were all very close in dollars.

“We’re really spending a lot of time talking about low dollars,” he said.

The property tax of $5 million makes a small part of the city’s $40 million budget, Jeffers said.
Jeffers said Pekin’s tax rate is $1.30 per $100 of assessed valuation and that town does not compare to East Peoria’s services.

“The one thing different about a city and a business is a business can layoff. We can’t do that. We can’t close down the police department or city hall,” Jeffers said.

 Jeffers said he would like to see the city’s services enhanced and added that the council should have at least an inflationary increase (4.1 percent) in the levy.

“Politically, I don’t want to just lower the rate to make myself look better,” Jeffers said.
Jeffers then asked other council members if they would commit to maintain city services and not lay anyone off if they lowered the tax rate.

Commissioner Mike Unes said he is trying to think long term.

“I have the belief that higher taxes don’t equal higher revenue,” Unes said.

“What we want is to continue being an inviting community,” he added.

If the tax rate is down, Unes said people will have more money in their pockets to spend at the businesses in town.

Unes used the decline in gaming at the Par-A-Dice Casino as an example of higher taxes lowering revenue.

Unes said that gaming peaked in 2002 about the time that a new tax was added to the adjusted gross receipts. The tax equaled 50 cents on the dollar.

“Other boats in other states are stealing our base,” Unes said. “It has sunsetted since then but the damage has been done.”

Mayor Dave Mingus said one could argue that any of the tax options are neither right nor wrong.
“We want to get a value for our people,” Mingus said. “We’re almost to the point of being obsessed to do the right thing.”

After some audience comments, Unes said he has spoken with many business owners who see next year as a flat one.

“We’re going to see an increase in revenue, but they have to deal with it. They have to tighten their belts. Why should we be any different,” Unes asked.

Unes said East Peoria’s sales tax is higher than some other communities in Tazewell County.
“We make up a small portion (of the property tax), but that doesn’t matter to a homeowner who can go across the township line,” Unes said. “I beg everyone to look beyond the surface.”
Unes said that option 5 would have garnered about the same amount of property tax profit the city did last year — $231,000.

Decker charged that council members had a month to look at the property tax options and he heard no suggestions on cuts. Unes replied there are areas in which to save money.

When it came time to vote, Densberger, Unes and Mingus said they opted for a lower tax rate.
A recommendation was made to amend option 9 and adopt option 10 instead, which reduced the amount of money the city would receive by $71,000.

Unes said option 10 was not his first choice.

Jeffers said voting for option 10 instead of 9 — since all of the options were so close in dollar amounts — “boiled down to symbolism over substance.”

Jeffers said he was disappointed in the amendment.

“We’re going to take a hit, but maybe as a taxing body, we’re better able to take it,” Jeffers said. “I don’t see us building the reserve fund.”

Unes said he resented Jeffers’ comment about symbolism.

“It’s very real. I vote on this issue with passion like I vote on all issues,” Unes said.

Option 10 passed with a 3-2 vote with Jeffers and Decker voting no.

“Well folks, what you see here tonight is democracy at its best,” Mingus said.

Audience comments:
Resident Dennis Paluska said a users tax is a better way to come up with revenue than property tax. This way, people who choose to go to a restaurant or a hotel will pay the tax.

“With the economy the way it is, it might be a good idea to keep (the property tax) at a minimum,” Paluska said.

Mike Graham, a resident, business owner and past president of the chamber of commerce, said he has heard stories of a business owner who will not expand, a restaurant owner who will not build a second restaurant and parents of school-aged children who are leaving East Peoria due to high taxes and the academic standing of the high school.

“These are real-life scenarios of people I know,” Graham said. “There’s this perception there’s a tax tsunami to everyone who steps foot in East Peoria.”

Graham said he is aware that schools are raising their levies and that the library is asking for a referendum this spring.

Graham asked the council to think long term of how their vote would affect consumers, residents and business owners.

Decker said he has heard of business owners wanting to come to East Peoria.

“I guess I completely agree with you that we should always lower our taxes, but I’m not hearing from you how to do that, where to cut,” Decker told Graham.

Graham said if the county sales tax is passed by voters in April, it will put East Peoria at a disadvantage. That 1 percent tax, which would be paid to the schools, would make the city’s sales tax 9 percent, 1 percent above Peoria’s.

Graham recommended the council form a committee to look at ways to keep costs down or increase revenue. Graham said he would be a part of that committee.

“The bigger picture is growing that tax base (lure them here),” he said.

Decker said a lot of blame is placed on the city, but there are other taxing bodies.

Densberger said East Peoria’s tax rate is the same as surrounding communities.

“With growth comes the need for expanded services,” he said. “In the past, the city hasn’t done a good job of keeping these level.”

Graham said the city needs to put influence on the schools to keep property tax down.

Resident Bob Jorgensen, who is on the city’s Green Team, said he hopes that team can help the city reduce costs by thinking green.

Jorgensen also said he does not have a problem paying his property tax bill.

“I’m thrilled with the services I have,” he said.

Jorgensen said he shops East Peoria first, even if it costs more.

He added that the East Peoria Chamber of Commerce needs to promote East Peoria’s businesses more so people shop here.

Jorgensen suggested a users fee for the parks. He said when he goes to Wisconsin, he pays a users fee to use the bike trails.

One thing Jorgensen does not support are businesses which received Tax Increment Financing. He suggested city officials revisit giving tax breaks to big box stores.

“I don’t want to push the smaller businesses out,” Jorgensen said.

Audience member Judy Minner, who is a realtor, said her taxes have increased 33 percent.

She asked who can be held accountable for the tax hikes. She said she does not want to lose services and she understands that the city needs revenue; however, she said she has a hard time selling homes in East Peoria.

“I try to bring people into the community, but it’s hard because it’s always ‘taxes, taxes, taxes,” she said.