Collinsville City Council on Monday night discussed the possibility of raising its 1.25 percent utility tax rate and changing its policy on the tax to combat potential budget issues, including the dissolution of the Collinsville Area Recreation District and state budget cuts.
The utility tax funds the Capital Improvement Fund, which is used for projects such as sidewalk and road repair and equipment replacement, among other things. The fund also grows by $600,000 from home rule sales tax annually, Interim City Manager Mitch Bair said.
Bair said the council could amend the policy regarding the utility tax’s dedication to only the Capital Improvement Fund so that it could also be used for parks and recreation purposes if CARD were to dissolve and permit the use of funds in the event of state budget cuts.
An increase to the utility tax rate, Bair said, could help the city in areas it is currently lacking, like infrastructure repairs and rundown equipment replacements.
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During previous special meetings/strategic sessions recently, former Streets Director Rod Cheatham has said the streets department needs additional employees, and Fire Chief Mark Emert has said the fire department is using an ambulance that requires oil replacement each time it arrives at a hospital.
... Are we going to tread water, go backward or move forward?
Councilman Jeff Stehman on the city’s budget issues
Bair showed the council members the proposed budgeted items for 2016 and 2017 Capital Improvement Programs, including an ambulance, and said Finance Director Tamara Ammann proposed a 2 percent increase of the utility tax rate over each year.
He also said the council could move $600,000 back into the General Revenue Fund to hire two full time employees in the streets department, where Cheatham had requested three employees, and put the rest of the money in reserves.
Councilman Jeff Stehman said although it might not be what residents want and it might “get tomatoes thrown at us,” he would vote to raise taxes if it would help solve budget issues.
“Should we just keep cutting?” Stehman said. “Cut positions, cut services so we don’t have to raise taxes at all? That’s not what I’m here for.”
“... Are we going to tread water, go backward or move forward?” Stehman added.
1.25 Collinsville’s utility tax rate
3.09 The next lowest utility tax rate of municipalities in the area
5.15 The highest utility tax rate in the area
Councilwoman Nancy Moss said she would be against raising taxes for residents at this time.
“I think the city has to tighten its belt just like everybody else does,” Moss said.
Councilman Jeff Kypta was in agreement with Moss.
“Everybody out in the real world, they’re not getting raises,” Kypta said.
For Collinsville residents, the median income is $52,132, and the mean income is $64,602, according to Bair.
Bair said a rebate program that would be revenue neutral and would establish a cap could be put into place for senior citizens, low income residents and disabled residents in the event of an increase to the utility tax rate.
According to Bair, Collinsville has the lowest utility tax rate in the area, with the next lowest rate at 3.09 percent, which Caseyville, Alton, Wood River and Hartford charge their residents. Among the numerous municipalities charging 5.15 percent, the highest in the area, is Belleville and East St. Louis, Bair said.
The average utility tax rate is 4.42 percent, according to Bair.
Mayor John Miller said the council needed to think about what would be necessary for the city, suggesting that it might not be increasing the rate to 5 percent, but perhaps somewhere between 1.25 and 5 percent.
I think the city has to tighten its belt just like everybody else does.
Councilwoman Nancy Moss on raising taxes
Council members discussed the utility tax rate during the special meeting/strategic session prior to the regular meeting.
During the regular meeting, the council approved a resolution supporting the selection of the St. Clair County site for the National Geospatial-Intelligence Agency proposed facility, NGA West.
According to the resolution, the benefits of the St. Clair County site include that it:
▪ Meets the needs of the agency
▪ “Synergies” with Scott Air Force Base (U.S. Transportation Command, Defense Information Systems Agency, and Air Force Network Integration Center)
▪ Is least expensive
▪ Is a convenient and safe location with expanded transit opportunities through MetroLink
▪ Is a large site with room for expansion and available for immediate construction
▪ Has proximity to MidAmerica St. Louis Airport and new Midwest Cyber Center of Excellence
▪ Offers potential increase in economic development and prosperity within the community as NGA currently employees more than 3,000 people with an estimated 1,350 construction-related jobs
The City Council meets next at 7:30 p.m. Nov. 23 at City Hall, 125 S. Service St.
Lexi Cortes: 618-239-2528, @lexicortes