Friday, Nov. 06, 2009

Sales tax for levee upgrades falls short

Measure produces less funds than anticipated

GRANITE CITY -- A new sales tax that metro-east leaders hoped would raise about $12 million yearly for upgrading the region's Mississippi River levees is generating about 10 percent less than anticipated.

Les Sterman, who is overseeing the levee upgrades for the newly created Southwestern Illinois Flood Prevention District Council, said the weak economy is to blame.

"We believe we're going to take in about $10 million a year," Sterman said at a breakfast meeting Thursday of the Chamber of Commerce of Southwestern Madison County.

The quarter-cent sales tax began Jan. 1 in Madison, St. Clair and Monroe counties. Law allows the tax to be imposed for only a limited time, to cover a bond issue. Local leaders hoped it would raise about $170 million to $180 million for levee work. Estimates now are that it will raise about $130 million.

Sterman said that although retail sales might eventually pick up, "When we go to the bond markets, we have to assume $10 million."

Local leaders had hoped the federal government would pick up any additional cost, but now the federal government estimates the total bill could approach $500 million, and no federal money is expected to be available until 2044.

Sterman said the upgrades are urgently needed, because the Federal Emergency Management Agency has warned that the region's levees will be decertified under new flood-plain maps that are due out next year. If the levees are decertified, most residents would have to get flood insurance at a cost of roughly $1,200 per year, and economic development would virtually end, Sterman said.

"This area will turn to dust and blow away by 2044 if we don't do something," he said.

Madison County Board Chairman Alan Dunstan, who also spoke at the breakfast, said local leaders are re-examining the federal government's cost estimates and trying to think "outside-the-box" for other solutions. He said he hopes the U.S. Army Corps of Engineers' $500 million estimate is for a "bells-and-whistles" project that can be revised.

Sterman added, "We hope that the problem is not as serious as portrayed, and we can get that cost down."

Sterman said one funding possibility being examined is increasing the taxing abilities of the levee districts that control the levees.

U.S. Rep. Jerry Costello, D-Belleville, has introduced legislation that would freeze flood insurance requirements as long as the area is actively pursuing the levee upgrades. Dunstan said that legislation is critical, and needs support in the Senate.