Belvidere aldermen defeat motion to return utility tax revenues to original purpose

  By Susan Vela
Staff writer , Rockford Register Star Posted Mar. 28, 2016 at 9:07 PM

BELVIDERE — With a 5-3 vote, Belvidere aldermen defeated a motion tonight to separate utility tax revenues for street and infrastructure improvements from the general fund.

Ald. Mark Sanderson was disappointed after the vote at the Committee of the Whole meeting. His "yes" vote, along with similar "thumbs ups" from Aldermen Clinton Morris and Clayton Stevens, weren’t enough to enforce stricter use of the utility tax dollars.

They wanted itemized tracking of revenues from the 5 percent tax in the proposed $19.2 million annual spending plan. A new budget year starts May 1.

The utility tax — placed on gas, electricity and telephone usage — was established 16 years ago to help pay for road repairs. Once the Great Recession arrived, there was an official decision in 2010 to place utility tax revenues in the general fund coffers.

“(But) we need to know where it’s being put, not just in the general fund,” Sanderson said. “I’m going to keep fighting to try to get clarity for the taxpayers so they know where their money is going.”

In response to Sanderson’s arguments, Mayor Mike Chamberlain read a memo from Becky Tobin, the city’s budget and finance officer. She indicated that the utility tax revenues should stay in the general fund because they’re still needed to help fund day-to-day operations.

Without the dollars, aldermen would have to deal with some tough decisions, including how to solve a $1.2 million to $1.4 million shortfall. That shortage could force layoffs, higher property taxes or both.

“We are obligated to pay almost $2 million annually for police and fire pensions alone, and this number is only increasing,” Tobin said in her memo. “The local economy is showing some signs of improvement, but our revenues are nowhere near what they were before the Recession, and it is unclear at this time if they will ever fully recover.”

“I feel it is important to keep the utility tax reserves and future revenue in the general fund at this time.”

Tobin’s memo convinced Ald. Daniel Arevalo to vote against the motion.

“We’re not being irresponsible to our citizens,” he said.

Tobin has said that about $6.25 million in utility taxes went to police, fire and public works salaries between May 1, 2009, and April 30, 2015.

The tax has generated more than $30 million for the city, and almost $21 million has been spent on infrastructure since the tax was approved, Tobin said. Less than $100,000 has gone toward infrastructure projects since 2011, and motor fuel tax revenues have paid for some repaving, she said.