Tax Cuts? We Don't Need No Stinking Tax Cuts!

CEO Garman and the City Council again nixed any hope of reducing taxes levied by city government at the Council meeting on 4/2/2007. 

Click on this link to audio and come back for the rest of this post.

The City of Decatur needs better financial management and policies. It is time to "live within our means" and cut local tax burden.

Later in this article we share the simple facts, simple truth, questions for your council-person and better policy.

Simple facts: The City Council has voted one tax increase after another over the last four years. While they have voted time after time to increase taxes, the Council has not taken any meaningful action to limit or control runaway spending. The simple facts are that millions of taxes were taken out of the local economy each year after the Council enacted the 2003 "temporary tax increases" (i.e. utility taxes, food & beverage taxes, & other taxes). In addition, every year the City Council voted to increase local property taxes.

Decatur has one of the highest levels of aggregate property taxes in Illinois. Yet, a majority of Councilpersons including the Mayor, feel there is never a good time to cut taxes. CEO Garman insists that the only way to reduce taxes is if the Council will direct him to make "Draconian spending cuts" (his words not ours.)

Simply truth:  The Council is telling the citizens of Decatur that they all want to cut taxes but NEVER will.

In the last 18 months, the Council can't find a good time to reduce local taxes. On all of the following occasions, tax cuts have been suggested to the City Council and rejected with little real consideration:

1. At the time of the 2006 tax levy (Dec 2005)
2. At the time of the Jan 2006 long range planning sessions
3. At the time of the evaluating the 2006/2007 Budget (April 2006)
4. At the time of approving the 2006/2007 appropriation ordinance
5. At the time of the 2007 tax levy (Dec 2006) {Seeing a pattern???}
6. At the time of the 2007/2008 budget consideration (last Monday night)

It is a non-sequitur for the Council to state that it is a bad time to talk about tax cuts, yet, it is always a good time to spend more and more on discretionary projects. The City's runaway spending never gets geniine oversight or restraint from the City Council.

Questions for your favorite Council person:

• Why is City spending growing 10-15% per year more than the net change in population?
• Why hasn't the City Council demanded more accountability, explanation and resolution for runaway and extreme health insurance costs that have been common knowledge since 2004? (See MCSV Letter to Council in June 2006.)
• Why hasn't the City Council demanded more accountability, explanation and resolution for runaway and extreme pension costs?
• If we can't afford to cut taxes without "draconian spending cuts", where do we find the money for a $100 million lake, a $10 million police station, a $1 million transfer house facelift (without an intended use), millions of increases in city spending, and, 75% tax reductions for friends of the CEO Garman?
• How many people have moved out of Decatur in the last five years? How many moved into other Central Illinois cities? And why is that? (See our Post "Missing Persons")

We hope that if you get answers, you will let us know what those answers are.

Better Policy:

Here are several policy initiatives for the Council -

1. The Council should adopt a spending "live within your means policy". This policy would place a spending constraint on city government based on population, inflation and aggregate tax competitiveness.
2. A "blue ribbon" commission should be appointed by the Council to independently study spending, financial and tax implications of the City's financial needs (i.e. water reservoir, police facilities, health insurance, and pension costs). This commission should be tasked to make recommendations on city spending cuts. Hearings should be held with diverse groups in the community.
3. Create a working five-year projection of spending and taxes. This "working projection" should be a reference tool to consider all spending proposals.
4. Begin an evaluation of the financial implications and tax consequences of more City spending. Additional debt, debt service and tax burden should be analyzed for all expected spending projects.
5. The Council should commission an independent economic study to determine the competitive consequences of high taxes on attracting investment and new jobs to Decatur. This analysis should recommend which taxes levied by the city are most counter-productive to economic growth.