NORMAL — A drop in sales tax revenue and "less than stellar performance" of other revenue sources prompted Normal town staff to recommend an increase in garbage fees and a new local fuel tax in the 2015-16 budget.
City Manager Mark Peterson told the City Council during a budget work session Thursday the lower growth the town has seen in its revenue funds "may be the new normal."
"We used to see 8, 9 and 10 percent growth (from year-to-year)," Peterson said. "Now it's 1, 2 or 3 percent if we're lucky."
Because about 70 percent of the general fund's revenue comes from five sources — sales tax, income tax, utility tax, property tax and charges for services — Peterson said it is a challenge. The general fund covers the cost of the day-to-day operations of the town.
Increasing the garbage rate from $12 to $18 a month will bring an additional $757,500 to the general fund and cover 68 percent of the town's $3.7 million cost to provide the services, said Andrew Huhn, finance director.
"It's still a bargain," said Peterson of the garbage service provided by the town.
Huhn said a survey of other communities revealed many don't offer public garbage service; they either have a contract with a private hauler or the residents have to contract with a private hauler.
The proposed new 4-cent gallon motor fuel tax would bring an additional $600,000 to the general fund and put Normal in line with Bloomington, which implemented the 4-cent tax in August.
Council members made no comments about the proposed increases during the work session. Peterson said he previously spoke with each of them individually and there was no major objection. He plans to include them in final proposed budget that will go to the council for a vote.
While Peterson said the additional revenue will help the general fund, "there's still a lot of cost cutting. We tightened our belt."
The 2015-16 budget does not include any new full-time employees.
Huhn said an unexpected drop in sales tax revenue during fiscal year 2013-14 and into the current fiscal year could leave a $439,698 deficit in the general fund. But he thinks a recent upswing in that revenue will ultimately erase that deficit. Sales tax revenue comes in three months behind so the town has yet to receive revenue totals for the latter part of 2014.
Huhn said the most recent receipts showed a slight increase over projections.