Which taxes and fees will likely increase for Rockford residents will depend on whether voters restore home rule on March 20.
On Monday, city staff proposed two spending plans: one for if home rule passes and another if the referendum fails. If home rule passes, staff recommends aldermen approve Plan A, which would generate revenue for the city’s budget largely from visitors and the local entertainment industry.
Plan A includes a $1,000 annual fee for each video gaming machine and a 1-percent sale tax on all hotel stays, liquor sales and restaurant checks. There would also be a $695 lift-assist fee for nursing homes, charged when the Rockford Fire Department aids a fallen but uninjured resident back into a chair or bed.
Right now, Illinois law prevents the city from charging a lift-assist fee because the city does not have home rule. The state also limits what can be charged per gaming machine. Rockford currently collects $25 per device.
The fire department responds to more than 100 lift-assist calls every year. Each takes an emergency unit out of service for the duration of the call. The new fee would not affect those who are injured and need to be transported to the hospital.
In total, officials say Plan A would generate an estimated $3.9 million this year, leaving the city with a surplus in its balanced budget, which aldermen must approve by the end of the month.
There are no staff cuts under the plan, something Finance Director Carrie Eklund said echoes concerns aldermen have voiced since the citizen-led financial task force began reviewing city expenses last year.
“We’re able to continue to provide services citizens are getting today and enhance some of those and address some of neighborhood blight issues with an additional $100,000 in demolition funding,” Eklund said.
While all but two aldermen say they support home rule, details of Plan A were met with the mixed reviews among leaders Monday. Aldermen Venita Hervey, Chad Tuneberg and Tuffy Quinonez said they’re concerned that $1,000 per machine might be cost-prohibitive to small establishments.
“Going from $25 to $1,000, that’s pretty steep,” Quinonez said.
He said machine owners in his 11th Ward are willing to compromise and would be comfortable with a $250 to $500 charge. But, if the council approves the $1,000 fee, Quinonez would like it imposed gradually because he fears some owners would take their machines elsewhere.
“I am talking to at least three who are waiting to see what we are going to do,” he said. “They are looking at Belvidere and surrounding areas to take their businesses.”
If home rule does not go back into effect next Tuesday, Plan B would likely be adopted, and Rockford citizens could be hit with a 5-percent utility tax, a levy on natural gas and electricity. That tax would generate about $3.5 million in 2018 and about $9 million a year moving forward.
The tax would cost residential ComEd customers an average of about $6.25 per month, based on a scale created by state law. There would also be a 5-percent tax on natural gas.
A utility tax is one Rockford could have been charging all along, but leaders have chosen not to impose it. Aldermen say they’ve backed off because utilities are essential services and taxing them means taxing them could greatly affect the poor and small businesses. Leaders say taxing things like liquor, hotel stays, and gaming makes more sense as much of that revenue comes from disposable income and visitors.
Plan B would leave a more than $350,000 shortfall for the 2018 budget.
City officials continue to stress that the current deficit is in the general fund. That means that while there are other streams of revenue coming into the coffers, they can’t be moved to that fund because state law prohibits it. Money Rockford receives from gaming and entertainment, for example, cannot be used to pay general-fund expenses like police salaries because the city is not a home-rule authority. Those funds must be spent on tourism and entertainment.
Both plans are subject to change. A final vote by the full council is expected on March 26.