Crystal Thomas
The State Journal-Register
Without discussion, Springfield aldermen on Tuesday rejected an increase in the city’s sales tax but approved a hike in the telecommunications tax. The 0.25-percentage-point increase in the city sales tax was killed in a 9-1 vote, failing for the second year in a row. Only Ward 4 Ald. John Fulgenzi voted “yes.”
On a 6-4 vote, aldermen approved raising the telecommunications tax from 4 percent to 6 percent. Fulgenzi, Ward 3 Ald. Doris Turner, Ward 5 Ald. Andrew Proctor, Ward 6 Ald. Kristin DiCenso, Ward 7 Ald. Joe McMenamin and Ward 8 Ald. Kris Theilen voted for the tax.
Langfelder has said the sales tax increase — which would have brought the city’s total rate to 8.75 percent and cost people an extra quarter for every $100 spent — was needed to address a structural deficit created by a downward trend in sales tax revenues. For the first time in 30 years, city officials project sales tax revenue will be flat without an increase for the next fiscal year.
In his proposed budget, Langfelder addressed most of the city’s $11.4 million revenue shortfall by making $3.7 million in cuts, raising $5.5 million through the two tax increases and using $1.4 million of the city’s rainy day fund.
Revenue from the sales tax would have gone to the city’s general fund — which pays for services such as police, fire and public works — while the telecommunications tax increase is earmarked for Lincoln Library.
The telecommunications tax will automatically be implemented July 1, though legislative intervention could move up the collection date. A full year of an increased telecommunication tax would raise $1.2 million for the public library; if the tax were to not start until July, it would raise $800,000.
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McMenamin said he would need to see pay-level cost containment before he would vote for a sales tax increase. Coupled with slowing down salary growth, McMenamin said he has urged the mayor to propose diversifying the tax base and join other cities in taxing natural gas or motor fuel.
With the start of the next budget year coming on March 1, city officials are now under pressure to come up with additional cuts to balance the city’s spending plan.
Because the sales tax increase proposal was defeated, Langfelder said he would prepare amendments for $4.7 million in cuts that he didn’t want to consider. Those second-round cuts include laying off 25 firefighters, 25 policemen and two civilian traffic wardens, as well as discontinuing use of police body cameras, reducing snow removal and cutbacks on expanding street surveillance cameras on the east side, police computer upgrades and traffic light software.
Aldermen said they would like to see more cuts to the budget before they could consider another tax increase. Some said they would propose their own cuts to the budget at the council’s Committee of the Whole meeting next Tuesday.
Joe McMenamin for Ward 7 