Evanston aldermen went into Monday’s budget session looking at a 6.5 percent property tax increase, and after several close votes came out with a boost trimmed to 3.9 percent.
The aldermen voted 5-4 to spend $500,000 received from Northwestern University to reduce property taxes — after a lengthy debate about budget philosophy.
The $500,000 is almost half of a pool of money — $350,000 each year for three years — that the university agreed to pay after its purchase of 1800 Sherman Ave. took that building off the tax rolls.
For many years the aldermen have tried to follow a budget philosophy that uses one-time revenue only for capital improvements — in the belief that using such funds for day-to-day expenses will lead to more painful budget shortfalls down the road.
But with the city now scheduled to start receiving property tax revenue from commercial lessees in the building this year after a transitional period of getting no tax revenue from it, and perhaps persuaded that a payment spread over three years isn’t one-time revenue — the aldermen decided to spend almost half the money to cut taxes now.
The aldermen also voted 5-4 to shift $250,000 from water fund reserves into the general fund, despite warnings that it will mean the city will have to start issuing bonds sooner to fund water main improvement projects.
Aldermen Moran, Tisdahl, Wollin and Wynne voted against both measures.
The aldermen also approved a suggestion from Alderman Edmund Moran, 6th Ward, to drop a staff plan to start charging residents $1.50 to buy stickers to be used on yard waste bags and reinstate an increase in the trash pickup fee that appears on city water bills from $3.72 to $5 per month.
Ald. Moran argued the stickers would be a major annoyance for local residents.
Alderman Ann Rainey, 8th Ward, agreed with eliminating the stickers, but said the trash fee increase was unwise because the fee, unlike the property tax, is not deductible on federal and state income tax returns.
The swap, which reduces the property tax levy by a total of $100,000, was approved 5-4 with Aldermen Bernstein, Hansen, Rainey and Wollin voting against.
The aldermen may be able to reduce the property tax increase a bit more at their next meeting, Feb. 26, the last before the budget-adoption deadline at the end of the month.
They learned Monday that sales tax revenue has been higher than expected this year, but city staff asked for time to do further research before agreeing that it would be prudent to increase the sales tax revenue projection in next year’s budget.
Alderman Ann Rainey, 8th Ward, suggested also increasing the projected revenue from the real estate transfer tax — which has consistently exceeded projections in recent years. City Manager Julia Carroll said those numbers have been inflated by sales of major buildings that can’t be expected to happen every year. But Ald. Rainey noted that the big sales have continued for several years and argued they now can be expected to continue.
Tax hikes affect everyone
In a recent discussion about taxes, I heard someone comment that we should raise taxes as much as necessary to make sure we’re offering appropriate social services to those in need.
Though I appreciate the level of service we have in Evanston, I think we often forget that higher taxes affect everyone, including tenants and families with HCVs. Higher taxes are passed on to tenants through rent increases; for people with a Housing Choice Voucher, it can mean an increase in their out-of-pocket cost, which many HCV families simply cannot afford. We need to carefully balance the services we offer with their cost, as a tax increase will affect everyone, including the families we are trying to help with tax dollars.