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Evanston aldermen — having rejected increasing parking meter fines this week — may have trouble finding easier answers to closing a multi-million dollar budget gap this year — and potentially an even bigger one next year.

Alderman Tom Suffredin, 6th Ward, Monday suggested extending the city’s 7.5 percent hotel tax to apply to bed and breakfast establishments and possibly vacation rentals as well.

And City Manager Wally Bobkiewicz suggested it might be time to consider whether the hotel tax rate should be adjusted. “We try to be competitive with Chicago,” Bobkiewicz said.

It’s unclear at this point whether the resistance to increasing parking fines that largely hit city residents shown Monday night would apply to a tax that mostly hits out-of-town visitors. 

Applying the hotel tax more broadly

Evanston’s hotel tax is budgeted to generate $2.1 million this year. It currently only applies to properties with 10 or more rooms for rent.

Bed and breakfasts

Extending it to apply to the two licensed bed and breakfast establishments in town, which each have five rooms for rent, would generate a modest but not totally insignificant amount of additional revenue.

The Stone Terrace bed and breakfast in an image from its website.

Based on their published rates, if Stone Terrace and Stone Porch were fully occupied year round, a 7.5 percent tax would yield a little under $92,000.

Vacation rentals

Since the City Council adopted a vacation rental licensing ordinance in 2013 that required City Council approval of any license, it appears, from a review of Council meeting agendas, that only two properties have been licensed as vacation rentals — one in the E2 apartment complex at 1890 Maple Ave., the other in a home at 2353 Ridge Ave.

Two of the five vacation rentals in Evanston currently listed on the Airbnb website.

The best known vacation rental website, Airbnb, currently carries five listings in Evanston. A similar site, VBRO, also shows five Evanston listings.

Airbnb in 2015 announced that it would start collecting the state and Chicago city hotel tax from its participants.

At that time it said it had 4,550 vacation rental listings across Illinois. If they were equally distributed by a community’s population, that would suggest a city the size of Evanston might be expected to have 26 vacation rental listings on the service.

Given the typically sporadic nature of vacation rentals, it’s difficult to estimate how much income applying the Evanston hotel tax to them might generate for the city.

Changing the hotel tax rate

Current local hotel tax rates in suburbs close to Evanston range from 5.5 percent in Northbrook, through 6 percent in Glenview  to 7.5 percent in Skokie — the same rate Evanston charges.

Chicago’s North Shore Convention and Visitors Bureau Executive Director Gina Speckman says Chicago has two hotel tax rates  — a base rate of 4.5 percent citywide and an add-on charge of 4.64 percent to support the Metropolitan Pier & Exposition Authority that only applies in downtown Chicago.

Were Evanston to raise its hotel tax rate to match that levied in downtown Chicago, it might generate an additional $765,000 a year — assuming the higher tax didn’t drive business away.

Had the aldermen opted to raise the parking meter violation fine, last increased in 1976, from $10 to $20 as proposed by city staff, that was projected to have generated $390,000 in new revenue annually.

Bill Smith is the editor and publisher of Evanston Now.

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19 Comments

  1. Not one word from an

    Not one word from an alderperson around cost control.  Very telling.  Very depressing.

    I’ve said it once, I’ll say it again — consistent tax increases without meaningful, significant cost structure change is disingenous.  +33% increase in our state taxes, +18% average increase in property taxes, the Cook County soda tax — all likely diverting money from charitable giving.

    1. Stop spending

      The constant rise in property tax will ultimately decrease the tax base. Everyone I know is fleeing Evanston for Wilmette. Meanwhile parks and parking lots are getting unneccesary $1M makeoves all over the city.

    2. What would a reasonable person do ?

      What would you call a family that was in debt and not the money to cover basic expenses ? But then buys ‘art’, fund their local theater, makes  loans that may not be repaid or be forgiven Naive, stupid and a host of other terms.
      Do the aldermen play so fast and loose with their family budgets ? If so watch out for their  bankruptcy and don’t loan them your money !

    3. The Golden Rule of Government

      Their rule is always raise taxes—never cut spending esp. if it offends their supporters.

      I think the words ‘cut’ and ‘control’ do not appear in their dictionary. But ‘spend’ is in large bold letters on every page.

  2. no easy answers

    It seems the city councilor looking for easy ways to tax, fine, and impose greater limits on everyone but themselves in this problem of revenue shortfall. Easy answers are what got us into this mess, I would guess. Where are the suggestions to reign in spending? Where are the ideas on making Evanston a more attractive place to open a business and to keep it open? I see new building upon new building, and proposals for more and more of them. Great. Another place to levy taxes and more people to fine for parking or traffic violations. Sooner or later we are going to run out of spaces to erect more buildings. Then what?  It’s time to look for ways to cut spending and look for ways to entice businesses – not just restaurants – back into the town. If we don’t do that, there will be even greater shortfalls due to the flight of homeowners and the moving of small businesses to places where we are valued rather than beaten down by city councils that can’t figure our how to say no more spending.  And if I had real answers, I’d be running for alderman in my own ward where our streets are rutted and potholed and our taxes are increasing. Instead, I can either vote for wiser representatives (which I do) or leave this city that I love and move to a place where I can afford to live. We are neighbors to little towns that look better and better to me every day.

    1. Many apologies for all the

      Many apologies for all the typos. The “edit” feature on this site leaves much to be desired.

      BTW, I was not referring to Wilmette as a neighboring town. But it is, and along with Skokie, Lincolnwood, Morton Grove, Niles, etc we have plenty of choices. I love Evanston, but it has become so different a place from what it was when we purposefully moved here in 1977.

  3. Not Fleeing Evanston for Wilmette

    According to Zillow, the median home value in Wilmette is $640k, compared to $330k in Evanston. Wilmette’s property tax rates are 10-20% lower (because rich suburbs can always afford lower rates even if they spend more). But even if you have the money to buy the same place in Wilmette, you will pay more in taxes because of the higher property values. So a rational person won’t flee Evanston for Wilmette (but plenty of rational people should flee Chicago for Evanston).

    1. What about other towns?

      What about Skokie ? Lincolnwood ? Morton Grove ?

      There must be a number of towns run by adults who know how to budget and properly spend taxpayer money.

      1. How about just eliminating

        How about just eliminating the random Wally FTEs that he keeps around? Fellow employees, you all know what I’m talking about. I hope some of the Aldermen and Women are on to the games occurring on the 4th floor. Personally, I’m tired of furlough days and seeing GOOD staff leave because Wally has a hard-on for some other staff he can’t seem to emotionally disconnect from. Someone please help. 

        1. Wally’s World

          Wally…add in Marty, and the others……the Assistant City Managers, etc…(may have different titles), but they all have humongous salaries.   Wally & Marty alone make over $400,000/year……Richardson, Storlie, Parker, Efiom, ….you’re getting into the million mark.   How inane is that?  So then, the “little” people get salaries and raises frozen, have to take furlough days, can’t work overtime when it’s needed, etc…the list goes on and on.   This plethora of overpaid, overblown employees should all be cut out.   this is why Evanston is NOT a livable city…it’s got too many 4th floor employees……gives tons of money away to new businesses and worthless projects, and can’t even figure out what to do with one old mansion!   EVERYONE….wake up!   Yes, people are moving out of Evanston!

          1. When do WE get a vote on Wally ?

            Wally, the life time city officials and bureaucrats and now the library Director and board [soon to probably cost us big over  Ms. Williams]  keep costing us money but we have no vote on them other than voting for the Council and Mayor who will protect their own. We need a zero based budget [i.e. every  department justify its existence and budget every five years] and all city employees at least from department manager have  to re-apply for their job no more than every five years. 

            Unfortuantely  voters have had the wool pulled over their heads so long that they would not recognize competent government.  They would vote for a ham sandwich if it was labeled ‘Democrat’—anyone else would know it is not worth their time  and money to apply.

        2. Spot on!

          Wow…you hit that nail on the head!  Are so many people really that naive, that they can’t see Wally’s tribe pretty much destroying things from the top down?  Maybe Northwestern should take over the entire city…call it Northwesternville, and run it like it should be run.  Oh, wait…I must be dreaming.  Evanstonians are a bit brainwashed….especially the aldermen for hiring and retaining Wally…giving him pay increases, and believing everything he says.   Check out how the surrounding suburbs are doing…they are NOT falling into a pit like Evanston is.    

    2. go to Skokie

      Skokie’s home prices are way lower than Wilmette….crime is low compared to Evanston…paking is plentiful and free, and they haven’t raised taxes in many years.  there is transportation aplenty, and there is a lot to offer.   ….doesn’t have to be Wilmette……

  4. Cut the Stitch

    Save 95k minus the cost of a simple light fixture to safely light that area. It is a strech to call the Stitch a work of art, Also, the the Stitch is miss named because it doesn’t resemble a stitch. It looks like a spasm.

    If the city really has an ordinance to spend a certain percentage of the budget on the Arts it should be deleted. Arts spending should only be done if sufficient funds available and and a need to do so.

    Another way to save money is not to allow anyone to lease the mansion for a dollar per year. The last time this was done cost the city millions, as it was scammed by the Evanston Arts Center. The city needs to make a fair profit when leasing or selling the mansion. The next best solution is to tear it down.

  5. “Saving Illinois” might save Evanston: public bank proposal

    Other than cost reductions, I agree that there are no easily implementable answers to address Evanston’s revenue shortfall. I would go further and say that it is a mistake for officials and residents to keep looking because the Evanston economy and city budget exist within larger economic structures, many of which are fraudulent, including the basic U.S. operating system — money + banking + “democratic” process.  

    So, although there are no easy answers, I believe there is a CLEAR answer regarding the direction for a city like Evanston to take:  a public review and re-design of the U.S. operating system that for most of 220+ years has negatively impacted states, counties, municipalities, and most living organisms (human and non-human), with increasing rapidity.

    Serendipitously, yesterday a national expert on the U.S. operating system turned her attention to Illinois and offered a useful action step.  See Ellen Brown’s latest blog on Truthout, Saving Illinois: Getting More Bang for the State’s Bucks, in which she describes Scott Baker’s July 3, 2017 proposal (How to fix Illinois’ Debt problems…and any state’s, OpEdNews).  The proposal is to create a State of Illinois bank (similar to the Bank of North Dakota, whose lending is tied directly to public policy) capitalized by various a portion of the existing rainy day funds, such as pension funds.  (Ellen is the founder of the Public Banking Institute.)

    Whether this will quickly or directly help the City of Evanston or not, I cannot say for sure.   But this seems to be an actionable proposal towards which Evanston, with its wealth of intellectual capital (that is sometimes focused on justice and equity), can easily put some positive energy.  There are other Evanston residents who have been studying inequities in our operating system and who can work out  some of the details.  Likewise, there are people across Illinois who have been looking at similar proposals and who would be interested in partnering on a statewide effort to reclaim public control of our public monies.

    If the City of Evanston would like to convene a public discussion about working with our state legislators and other Illinois people to craft a legislative proposal, I would be happy to help in the planning of such a discussion.  My offer includes inviting Ellen Brown or Scott Baker to Evanston for an action-oriented learning + legislative event.  (In a private communication Ellen has expressed interest in coming to Illinois.)

    In truth, I can confidently say, at the age of 66, that since the 1780s we Americans have either been royally snookered, confused or lazy about money, banking, and democracy — or a combination.  Probably it’s not productive to ask whether the cause of our current intellectual morass is corruption, stupidity, or laziness.  The fact is that we are in a global collective morass — “no easy answers” — that is threatening to destroy the social networks that support life. 

    The good news is that there are many living Americans — including Evanston residents —  who have been working on extricating us from this mass confusion.  They have information worth sharing and the internet has speeded up that information sharing so that most of the puzzle pieces are visible.  It seems like a good moment to bring all these thinkers and puzzle pieces together, under the auspices of a public body such as the City of Evanston, and start working directly on an operating system re-design.
     

  6. Revenues < Expenses = Deficit

    The issues confronting the City of Evanston, D65, Cook County and other government bodies in Illinois aren’t that difficult to understand. Some people view the issue as Revenues are less than Expenses, and other people view the problem as Expenses are greater than Revenues.

    D65 had (will continue to have) a structural deficit because their expenses grew at a faster rate than their revenues. Why did this happen? At District 65, their revenues (our taxes) are limited to the consumer price inflation, CPI. For almost the last decade, CPI has averaged around 1.5% but D65 costs have risen at a much faster rate. Why? Primarily because the cost of providing teacher salaries and benefits have increased in the 3-4% range (total compensation is about 75% of D65 budget) D65 solution? Initiate a referendum and raise taxes. Community voted overwhelmingly for this solution. One may ask why salaries and benefits have been growing at a 3-4% rate.

    City of Evanston is in a similar situation. City salaries and benefits have been rising at a much faster rate than taxes. However, one big difference is that the City of Evanston is a “Home rule” government body, meaning that the City government isn’t limited to CPI for raising taxes. Technically, the City government could just raise taxes assuming Alderman approved this idea. Of course many taxpayers may not agree with this action.

    A major issue not discussed is that while job growth has improved over the last 10 years, wage growth has been very anemic. This is reflected in national, state and local income trends. Median household income has compounded at about 1% over the last decade whereas in the public sector, wage growth continues to compound at the 3-4% rate. The only way to continue to fund this public sector wage growth is to raise taxes. 

    So that’s the conundrum. Not too difficult to understand.

    What do people want to do?

    1. Understand

      Teachers’ salary is going up much faster than they should be rising. Just like state unions getting more money than the private sector. Unions are Illinois and Evanston primary problem. Unions jobs should be outsourced to the private sector to lower salary and benefits. School boards are not standing up to unions and not doing a good job in general. School board schemes are failing to work. Spending more money is not improving our schools.

  7. Couple Ideas for New Revenue

    The Council should first explain why there is somewhere bettween 2 and 5 million dollars uncollected for parking tickets    Consider have a parking meter rates in downtown Evanston the same fee. Not $1.00 on one street and less than a $1.00 on others.  Elimate first hour FREE parking in the garages.

    1. Council explanations

      Maybe they should explain why they keep renewing Wally’s contract….and obviously think he’s doing a wonderful job.  That’s a mind-boggler.

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