Disappointing revenue projections are forcing the city of Bloomington to tighten its belt. In fact, it’s looking to save more than $2 million from a $91 million general fund budget during the final four months of its fiscal year. That’s not much fun. Some job openings won’t be filled; some plans and purchases will be delayed.
The loudest alarm is coming from sales tax receipts that are running more than 3 percent behind last year. If the current trend continues, it will mean a million dollar shortfall in this fiscal year’s sales tax revenue.
The picture is not as troubling in Normal. Even so, its sales tax receipts are running below projections. Why is this happening even as the national economy rebounds? Reasons most often mentioned are the migration from in-store to on-line sales and gyrations in the local State Farm workforce.
What’s really scary is how traditional revenue sources — taxes on sales, income, property and utilities — have pretty much flat-lined, leaving only three choices: Find other revenue, cut services, or do both.
At some point, you might be asked to define what you consider basic city services. The arguments get intense around quality-of-life elements like parks and libraries. But most would agree police and fire protection, a safe and plentiful water supply, and street and sewer maintenance belong on the “must have” list.
Yet even then, if dollars are short, harder questions can be asked, like: “Must every street be plowed after a snowstorm?” “What‘s an acceptable response time from the fire and police departments?” And “How often does garbage need to be picked up?”
Both Bloomington and Normal ramped up garbage collection fees over the last couple years, but they still don’t come close to covering actual costs. Expect both cities to address that issue this year — and not necessarily by raising basic fees.
Bloomington residents could see a bump in sewer rates this year. And Normal will likely consider raising its motor fuel tax by 4 cents a gallon so it matches Bloomington’s, which went up 4 cents in August.
Curious, isn’t it, that even though Bloomington’s gas tax is currently higher than Normal’s, at-the-pump prices are about the same in Normal as they are in Bloomington?
Does that mean gas stations in Normal are taking the opportunity to pad profits? Or that gas retailers in Bloomington are squeezing their profits to stay competitive with Normal? Or that some of both is going on?
At any rate, the higher tax, targeted for street repairs, hasn’t diminished gas sales in Bloomington. In the single bright spot in Bloomington revenue production, motor fuel sales are running well ahead of projections, meaning extra cash could be available for much-needed street work.
For motorists, it’s comforting to fill up for fewer dollars. But the low ebb in gas prices might be seen by government at all levels as a ripe opportunity to increase gas taxes.
The Federal Highway Trust Fund that pays for improvements to the roads we drive is in the red. The 18.4 cents-per-gallon gas tax that funds it was last increased 22 years ago when gas was $1.16 a gallon. Could Congress get its act together enough to pass a justifiable increase now, while prices are lower and a step-up would be more palatable? Nah.