City Finance Committee discusses sales tax proposal

A sales tax hike is back on Rockford’s radar. The Rockford City Council Finance Committee mulled over Ald. Daniel Conness’ (D-14) proposed three-quarter cent sales tax increase—which could generate $12 million—during its special July 27 meeting. Committee members approved holding a public forum.

Winnebago County Taxpayer Advocates’ Tim Emert said, during public participation, he wanted to address the referendum’s timing. Emert said the last time city and school referenda were up at the same time, they both failed: “We like the idea that you’re getting out of the box. But history does repeat itself.”

Emert also proposed reducing the county jail tax by one-quarter cent and raising the sales tax one-quarter cent.

“I wanted to get the question of road resurfacing out for discussion,” Conness said, noting he hoped to get the resolution, which was introduced during a July 10 City Council meeting, on the Nov. 7 ballot.

Finance Committee Chairman John Beck (R-12) said, if the resolution passed committee by Aug. 14, and then rules were suspended and the resolution was approved, the referendum could make the Sept. 5 deadline for getting on the ballot.

Conness’ resolution calls for a proposed .75 cent sales tax increase, which would finance the capital improvements identical to the question that failed on the April 2006 ballot, which called for a 1 percentage point increase in the sales tax. He said the resolution would also do away with the city’s vehicle sticker, though the resolution makes no mention of that, according to City Administrator Jim Ryan. Having no capital improvements program would cost the city matching funds for state and federal projects, according to Conness.

He also acknowledged surprise at the failure of the last referendum: “I didn’t feel there was a possibility that (the referendum) would go down the way that it did.” Conness said he’s heard naysayers claim that the proposed sales tax won’t pass in November because of the Rockford Public School District 205 referendum.

“If it is on the November ballot with the schools, so be it,” he said, adding that “I’ve got a feeling that the school district will, at least, discuss this.”

The proposed increase would sunset in June 2009, when Rockford Mayor Larry Morrissey and all 14 aldermen—including Conness—would be up for re-election.

“There’s a lot of mistrust with us elected officials,” Conness said, while explaining his rationale for the two-year sunset. “I’m putting it all on the line. I’m hoping everyone else will, too.”

Beck noted reservations about the length of the sunset, since it would only allow the city to collect nearly 18 months in revenue. He suggested extending the sunset’s life.

Morrissey said he’d support a five-year program that could be presented to the voters. But Morrissey noted aldermen haven’t approved a capital improvement program yet. He also spoke to how the timing of the referendum could affect the city.

Ald. Joe Sosnowski (R-1) said he’d favor creating a four-year plan, complete with suggested investments.

According to Morrissey, if the referendum were put up and passed in April 2007, the city couldn’t start collecting revenue until 2008: “We have to accept and understand that.” He also said the city and District 205’s destinies are intertwined.

“We’re in this together, whether we like it or not, with the school district,” Morrissey said.

Ald. Carl Wasco (D-4) said the city needs to build a strong coalition, if it plans to make voters choose between roads and schools. Wasco said hurting the schools would affect property values. According to Wasco, District 205 is making positive strides, including reducing debt and truancy. If we don’t continue the district’s improvement, Wasco said, “fixing the roads won’t bring (it) back. I want the guys that ran commercials against us to run them for us,” Wasco said, adding “they need to understand cash is better than credit.”

Morrissey didn’t agree a referendum would jeopardize schools: “I don’t see us in conflict with the district. I think we’re in partnership with the district.”

He stressed he supported the proposed sales tax increase, but noted it needed to be done right.

According to the resolution, 25 percent of the money would be earmarked for paying down existing street bonds, while the remaining 75 percent would go toward arterial, collector and residential resurfacing and reconstruction projects throughout the city.

Finance Director Andres Sammul warned committee members against promising citizens a tax savings. Sammul said assessments—over which the city has no control—could rise and produce higher tax bills. He worried that if citizens didn’t see a clear saving all-around, the city would be left holding the bag: “They lied to us again.”

Conness disagreed, “We are definitely not hurting ourselves” by paying down the bonds. Conness noted he’d prefer not having a sunset, but he said it was necessary to handle the objection of the voters.

Each alderman would receive 1/15 of the funds for ward-specific street projects, while Morrissey and the Public Works Department would use the remaining share for discretionary purposes.

Conness said that though not all wards will be able to contribute equally, the revenue will be divided equally. He also noted the sales tax includes revenue from those visiting Rockford.

Beck asked how the resolution would deal with allocating money for large projects.

Ald. Jeff Holt (D-11) replied that increasing funding for the residential street program should be a goal, and the city is still receiving motor-fuel tax revenue. Holt said money directed toward retiring the bonds, motor-fuel funds and the 1/15 share earmarked for discretionary spending should be pooled together to finance bigger projects.

Ald. Doug Mark (R-3) agreed: “This is about roads. This about getting it done. I think we need every dollar available.”

Conness earned the appreciation of Ald. Frank Beach (R-10) for bringing the resolution to the committee. Beach noted that the city has accrued more than $60 million in debt.

“It behooves us to look at our whole budget. We must find a way to communicate the need (for the referendum),” Beach said.

From the Aug. 2-8, 2006, issue

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