Some stories in this issue of the RoundTable spell out grim financial news. With building-permit fees and the City’s share of State income taxes and State sales taxes all coming in at levels less than projected, the City’s second-quarter financial report is unsettling.
The projected shortfalls in this year’s City budget range between $3 million (under Scenario 1, pegged as the most likely scenario) and $5.6 million (under Scenario 2, the worse-case scenario). In addition to the decrease in building-permit fees, reductions in the City’s share of State income taxes and State sales taxes contribute to the shortfall.
The reduction in building permit fees is attributed to a delay in three or four major projects in the downtown area. The City expects these to start next year, but the delay leaves a hole in this year’s budget.
The decrease in the amount of the City’s share of State income taxes and State sales taxes is attributed to the softness in the State’s economy. Under Scenario 1, the City estimates there will be a shortfall of $400,000, or 5%, in its share of income taxes, and a shortfall of $780,000, or 7%, in its share of State sales taxes.
Under Scenario 2, the City estimates there will be a shortfall of $780,000, or 10%, in its share of State income taxes, and a shortfall of $1,370,000, or 12%, in its share of State sales taxes.
These are significant declines, and are a reflection on the State’s economy generally, rather than specifically on Evanston. But they are worrisome numbers.
Some businesses in Evanston are struggling as well. Even before the July 1 opt-in to Cook County’s Minimum Wage and Sick Leave ordinance, Internet sales were gnawing at their bottom line. Now the Chamber of Commerce and some businesses say the County ordinance will add an unsustainable burden to some employers.
Let us be clear: We support the minimum wage increase. We see the opt-in as a call not to disparage workers who clearly deserve a living wage but to support Evanston businesses so they can meet these requirements. In other words, we should all try to support our local businesses and spend our money here.
At the hastily called June 30 City Council meeting, some aldermen had concrete suggestions about how to support local businesses. Third Ward Alderman Melissa Wynne spoke about the insidious nature of Internet purchasing: People “shop” locally, garnering information and advice from a business here, but then go home and purchase the item, or a similar one, from a website. It’s easy to do: The web is open 24/7 and some sites will have recommendations tailor-made to the customer, free delivery, and, many times, lower prices. Lost immediately in such transactions is the support for a local business.
In other transactions that are conducted solely through the Internet, there is no personal connection with the shopowner or clerk, and the sale is also lost.
A local shopping trip offers the opportunity not only to browse the varied merchandise in the shop but also to visit other shops in the area. A trip to the hardware store, for example, can be extended to include stops at a bakery, a bookstore, a coffee shop or restaurant, or a gift shop. The Internet threatens this dynamic.
Second Ward Alderman Peter Braithwaite said, “We will have to support our local businesses, and some of us will have to change our behavior.”
As an example, one resident pointed out at the June 30 meeting that not subscribing to Amazon Prime can save $100 per year – an amount that could be spent on local shopping.
Ald. Wynne went on to say that if the minimum wage is to work here, “You must buy locally and not off the Internet. … If you can buy it in Evanston, you must buy it here, so that businesses who are now paying the minimum wage continue to stay open. If you have to pay a little bit more to buy it in Evanston, you must make the sacrifice. This is what we have to do. …”
Supporting local businesses – buying, dining, and playing locally – may require, as the aldermen said, a change in behavior and at times an added cost. But having a business shut down or relocate is a steeper cost to the community. This is what we have to do, of course, but it is something we should also be glad to do.