Bobby Burns.

City staff told the Finance and Budget Committee Tuesday night that Evanston is on track to run general fund budget deficits as far as the eye can see.

But despite that, some council members on the panel pushed to increase spending to fund more affordable housing.

The staff budget report says that even with a 7.9% increase in the property tax levy next year the general fund will spend $10 million more than it receives in revenue in 2024 and that the annual shortfall will increase to $13 million by 2027.

Without the tax hike, the deficit is forecast to be nearly $14 million next year, rising to more than $17 million by 2027.

The city has sufficient extra reserves now to cover the shortfall next year, and, if the property tax hike takes effect, to cover it in 2025 as well.

But, after that, the over-spending would lead to the city exhausting its reserves by 2027.

Ald. Devon Reid (8th) said the city needed to have “tough conversations with taxpayers” about raising taxes on a regular basis to meet the city’s needs.

The committee is expected to scheduled additional meetings over the next few weeks to discuss the budget issues.

Earlier in the meeting, while discussing the city’s affordable housing programs, Reid suggested the city create a new program under which it would issue bonds to fund affordable housing developments.

“We have an affordable housing crisis on our hands,” Reid said. “When the city has site control” of a property “we can get amazing things done, and bonding out can give us that control.”

Ald. Bobby Burns (5th) suggested Hampton, Virginia, as a model. That city, he said, issues $750,000 to $1 million in bonds each year to fund affordable housing projects.

Committee member Leslie McMillan said she wanted to see a lot more detail about the benefits before adding to the city’s debt.

Reid noted that the city will have reduced its bond indebtedness by $34 million by the end of this year by paying off maturing bonds and not issuing new ones since 2021.

But he didn’t mention that the proposed city budget calls for issuing $44.5 million in new general obligation bonds in 2024.

Reid suggested the city could spend $35 million or $50 million and still not meet the need for more affordable housing in Evanston.

Ald. Clare Kelly (1st) said she didn’t want to bond in a way that “makes Evanston less affordable in the name of improving affordability.”

She said she’d only be comfortable with the idea if the spending would place properties in land trusts so that they would be affordable in perpetuity.

Burns said that’s the model he would favor. He cited as an example a recent sale of a city-owned abandoned home on Hovland Court to Community Partners for Affordable Housing, which plans to rehab the building and place it in a land trust.

Bill Smith is the editor and publisher of Evanston Now.

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