Council votes to keep utility tax

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DECATUR, Ill. (WCIA) — There was a chance Decatur’s utility tax could have dropped down to 1.25 percent, but city council voted otherwise Monday night. They decided to keep the tax for natural gas and electricity for city residents at 4.25 percent. The tax brings in $3.4 million dollars a year for the city.

Six council members voted yes. One council member, David Horn, abstained. He suggested dropping the tax to 4 percent before being outvoted.

“Our rates are higher for residential users than they are for commercial users,” said Horn. “And so if we were to reduce the utility tax, and reduce the rates of that utility tax for electric users, we would be saving our taxpayers money. And this tax disproportionately effects lower income individuals who need that money for other things.”

Horn said the city is expecting a $2 million surplus in next year’s projected budget, suggesting it would cover money lost from the tax cut. He also said city council had already discussed increasing their cash reserves at their last meeting.

Mayor Julie Moore Wolf said Horn’s suggestion surprised the rest of council.

“First of all, we don’t have our budget yet,” said Wolf. “That was kind of thrown at council tonight because none of us had discussed it with Councilman Horn, he didn’t bring it to any of us, so we were kind of caught off guard as to what it would mean.”

And the cash reserves?

“We’re trying to build up those cash reserves for basically an emergency, a rainy day fund in case something goes wrong,” said Wolf. “A few years ago, we got down to five days of cash reserves and that’s dangerous because if you have a major tornado, you have a major snowstorm, ice storm that shuts things down, it puts a lot of strain on a budget that you have in place, even if that’s a healthy budget.”

She also added they’ve been tight on budgets over the last few years and the city doesn’t have a lot of extra money.

But one person during public comment said the council already said no to one way for the city to make that: voting no to allowing sales of recreational marijuana.

“I would like to remind the city council that you just voted to turn down a bunch of potential income for this city, and now you’re talking about continuing a tax and not lowering it,” said John Phillips, Decatur. “Hmm. I wonder how that’s going to go over with the public?”

Besides allowing the sales of recreational marijuana within city limits, communities also got the option of deciding whether or not to tax it at 3 percent. Decatur city council voted 6 – 1 against allowing recreational dispensaries in the city. Counilman Horn was on the losing side.

“I was in support of a cannabis dispensary and other cannabis related businesses,” said Horn. “Both of those entities would increase tax revenue coming into the city. Those revenues would only be paid by the users of adult use cannabis. Instead, with the utility tax maintained what it is, all individuals that purchase gas or electricity will be taxed at this elevated rate as opposed to a discounted rate. What we could have done was gain revenue from cannabis that affects a small number of people, and reduce revenue from taxes for something that affects a much larger amount of the city.”

Mayor Wolf said the council’s decision on that matter was thought out.

“Well, there are projected revenues, and we have no idea what that really means,” said Wolf. “So what council did last week is we took a ‘wait and see’ approach. We’re going to see what happens in other communities, if there is harm, if there is cost, what kind of revenues come in.”

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