The City of Naperville conducted its typical process for the 2018 budget, with three budget workshops (October 30, November 13 and November 27), leading to City Council approval on December 5, with the real estate tax levy approved on December 19th.
City Manager Doug Krieger outlined $883,000 in “cuts” made to budgets submitted by department heads, and another $1.61 million in "cuts" resulting from departmental meetings. So departmental heads submitted budgets with increases they almost certainly expected to be reduced (the old negotiation game, start by asking for more than what you want and know you're not going to get), the increases in those budgets were scaled back, and that constitutes a budget “cut” per the City.
So, about $2.5 million ($883,000 + $1.61 million) was “cut” from the budget. Spending must be going down then, right?
Well, no. Spending was budgeted to increase from a projected 2017 (not the original 2017 budget, but the amount expected to actually be spent) total of $432.1 million (per City’s Proposed CY 2018 Budget, page 16), to a requested budget of $445.4 million, a requested increase of $13.3 million. (Worth noting is that included in that increase is a deferral of $5.5 million in the Capital Improvement Program, from $57.4 million in 2017 to $51.9 million in 2018 so the increase in operating expenses is actually greater than the total increase.)
The actual approved budgeted expenses for 2018 ended up slightly lower than the original request, totaling $443.6 million in spending, for an increase of $11.5 million from projected 2017 actual spending. That is an increase in spending, not a “cut.” Yet the narrative became how austere the budget was, and how substantial the “cuts” were.
The budget included, and still does, a $2.1 million increase in real estate taxes.
Some of the Council members, particularly Hinterlong, Coyne and Obarski, weren’t comfortable with the increase in real estate taxes, and expressed the belief that additional “cuts,” which would actually be reductions in planned increases, should be found. Or, alternatively, some combination of reductions in budgeted spending increases and increases in other fees and taxes to allow property taxes to remain the same or decrease slightly. That would allow real estate taxes to be held steady.
Councilman Hinterlong, at the December 5, 2017 meeting:
At the December 5th meeting, Councilwoman Obarski suggested an amended motion approving the budget but also directing City staff to continue looking for efficiencies and leaner government, and report back at the January meeting.
The amended motion was approved.
Seems pretty clear, right? Look for reductions in proposed spending increases, or at least a combination of reduced increases and some additional fees. So what was proposed at the January 16, 2018 City Council meeting? An increase in the telecommunication tax, from 5.0% to 6.0%, and an increase in the Hotel/Motel tax from 4.4% to 5.5%. The report on efficiencies and leaner government detailed “the proposed approach toward the identification of these efficiencies and implementation” in the future.
So no reduction in spending increases, but a “proposed approach” toward identifying them.
No surprise, as at the December 5th meeting, Mayor Chirico also said that the department heads “found more (“cuts”) than we asked for.”
On the agenda for the February 20, City Council meeting: an increase in the Home Rule Sales Tax, from 0.50% to 0.75%. The same Home Rule Sales Tax which was to “sunset” on December 31, 2017, but was extended for two years is now set to be increased. Also on the agenda is another deferral in capital spending, this one for $600,000 on storm sewer improvements. All of which will allow for a reduction of $200,000 in the total real estate tax levy.
So the budget with spending “cuts” of “more than we asked for” has $11.5 million in increased spending (even higher than that in the operating accounts, partially offset by deferrals in capital spending) requiring increases in the telecommunications tax and hotel/motel tax, and an extension and subsequent increase of the Home Rule Sales Tax. But they will hold the line on real estate taxes. (Think we’ll hear about holding the line on real estate taxes in any future political campaigns?)
That’s a budget cut.