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Evanston City officials are proposing a property tax increase as an element in their plan to close some of the COVID-19-impacted revenue gap in next year’s budget, but one Council member wants to consider other alternatives first.
At the Oct. 19 City Council meeting, Sixth Ward Alderman Thomas Suffredin asked whether Council members would be willing to accept a reduction in the services the City is currently providing in return for not having a tax increase, citing Evanston’s already high tax burden.
The City’s portion of the property tax bill is about 20%; the two public school districts take about 68%.
The alderman suggested, “There are a lot of people who might be willing to make such an exchange,” feeling, “‘I’ve been making a lot of sacrifices in my own personal economic life, and I would appreciate if the City would consider doing that as well.’”
City Manager’s Erika Storlie has proposed a 5.9% hike in the City’s portion of the property tax bill for the 2021 budget, generating about $500,000 in reserve funds and nearly $3 million overall.
Officials estimate the owner of a home valued at $400,000 would be paying about $114 more because of the increase.
But the increase comes on top of increases from other taxing bodies.
In a meeting with Cook County Assessor Fritz Kaegi earlier this year, upset property owners in the Chicago Avenue/Main Street let loose with complaints about double digit increases in their property tax bills, and the havoc that was having on residential properties and businesses.
In the 2021 budget, Evanston officials proposed the property tax increase as part of an overall budget balancing package, aimed at making up a shortfall of $8 million mainly due to the COVID-19 virus.
In their Oct. 19 opening presentation, officials said major losses are expected to continue to occur to the City’s Hotel tax, athletic contest tax, amusement tax, parking tax, and real estate transfer tax revenues – all areas that have been affected by the economic shutdown.
During Council discussion after the presentation, Ald. Suffredin acknowledged it was still early in the process but asked Council members to consider moving forward without the property tax increase on the table.
Alderman Ann Rainey, 8th Ward, asked what services the City would then get rid of to make up for the revenue hole created by removing the property tax revenue as an option.
“Do you want to cut the services we have with Groot [the City’s waste hauler]?. “Where do you want to cut the services?” she pressed. “With young adults?”
Ald. Suffredin said he hoped to learn what level of service cuts people would be willing to accept to reduce the need to increase their property taxes.
Asked by Ald. Rainey to come with an alternative, he offered, “How about video gaming for our suffering restaurants and taverns?”
“I second that motion,” said Ald. Rainey.
Ald. Suffredin added, “Realistically, that’s not going to generate money until people are safe being inside restaurants and taverns.”
But in a larger way, he said, the Council would have to open discussions on issues, such as the sale of City assets, to gauge whether people would be willing to entertain that in exchange for not having their property taxes raised.
Responding, Alderman Peter Braithwaite, 2nd Ward, said the proposed tax increase is one of the issues he plans to bring before constituents in his monthly ward meeting.
“No one likes to raise taxes and I do think that’s [Ald. Suffredin’s question] is somewhat of a loaded statement today to throw out to our residents,” he said. “No one likes that [a tax increase]. But I can also tell you what they don’t like: They don’t like an increase in parking fees. They don’t like a reduction of services, and the list goes on. So I think if you’re going to make a statement like that, I’m going to challenge you over the next several weeks to come up with $3 million worth of revenue.”
He also raised concern what effect the move would have on the residents of his ward who work for the City.
“ They don’t want to see any jobs cut,” he said.
Ald. Suffredin said one alternative might be to look at “possible tax sources that we have taken off the table in the past,” such as a storage-unit tax.
At the time, he observed, “that’s something we took off because we thought that was aggressive – that people who were renting storage spaces were people that were unlikely to be able to afford that.”
“Are those same people likely able to pay increased property taxes, or can you choose to not have a storage unit?” he asked about the questions he’d like to see answered.
“And there are other taxes that we’ve taken off the table in the past that may be less onerous and can help us reduce the overall property tax burden – which is, again, a serious driver of why people find Evanston to be unaffordable,” he said.
“A lot of it is not the City,” he said, “but again the reality is the total tax burden of Evanston is very high.”
During the discussion, Mayor Stephen Hagerty turned to Ms. Storlie for her view on the impact not having the property tax in the budget would have.
Ms. Storlie indicated officials would have to turn back to personnel cuts to make up the revenue loss.
In this year’s budget, she noted, the City eliminated 15 positions and held another 25 vacant, grappling with a shortfall estimated at $12 million.
“So we’re operating with far less staff than we’re typically used to year after year,” she explained. “We’re down about 50 people and we’re still trying to meet the needs of the residents and to try to provide the core services that everybody relies upon,” she told Council members.
Staff has been “amazing” and certainly has “risen to the challenge,” she said, trying to meet expectations with less.
But if the City were to eliminate the entire property-tax increase, which comes to a little over $3 million, she estimated, officials would have to find another 50 positions to cut.
“Our personnel account for 80% of our expenses,” she explained. “So if we’re going to cut expenses, additional expenses, they’re going to have to come from people.”
In that regard, the City has been “pretty fortunate” that of the 45 positions the budget is proposing to hold or eliminate, only one was a field position.
Without the property tax increase, she said, responding to Mayor Hagerty’s question, “that would mean that we would have to look to cut additional staff that are currently working. And then we have to find a way to deliver those services, a different way, or with less people. So that is our challenge that we have for us.”