Tuesday, August 12, 2008
sponsored by Jake's Furnishings

City: Taxes

What does the city get and what do they do with it?

Send a link to a friend

[August 12, 2008]  People like to know what their taxes go for. The city treasurer, Lester Plotner, knows this and he knows much more when it comes to the city of Lincoln.

RestaurantFollowing the start of the city's fiscal year in May, city of Lincoln department heads provided annual reports to the mayor and council. Plotner held off his report, waiting for the annual audit, which will be back soon.

In the meantime Plotner prepared some revenue and expenditure figures for the council to consider as they make their continuing decisions.

His compilations are comparatives involving either all that was available or the pertinent past years. He also explains the significance of some figures and makes projections based on history, known changes and what other authorities, such as the Illinois Municipal League, are saying. He explains the impact of state of Illinois mandates and makes sense of tax-capped versus non-tax-capped funds. And, finally his report recalls the current development agreements now in effect.

Accounting

Plotner works closely with the city clerk, Melanie Riggs, in getting and assessing figures. He makes recommendations on how the city can meet obligations, when and where they can move forward and yet stay in the black.

He also works with the mayor and various department heads throughout the year with an eye on keeping the city functioning, special project expenses and future planning.

While not conclusive, in some cases the multiyear comparatives may be providing the council with the possibility of seeing the results of decisions that they have made in the past with an eye toward the future, particularly in the city's participation in attracting new business.

The opening figures table tax revenues, starting with sales taxes and continuing into income taxes. He explained that increasing revenue changes seen from year to year may be the influence of a healthy economy, the addition of businesses and the expansion of jobs in the city.

A look at some tax receipts over seven years

Sales tax

Sales tax jumped 12.3 percent over last year. This was an increase enjoyed statewide this year, but the Illinois Municipal League says not to expect the same jump in this coming year.

SALES TAX COMPARISONS

2001-2002

$ 1,892,592

2002-2003

$ 1,912,639

2003-2004

$ 1,912,657

2004-2005

$ 1,966,144

2005-2006

$ 2,000,698

2006-2007

$ 2,102,914

2007-2008

$ 2,362,842

Use tax

Use tax is up 5 percent.

The Illinois Municipal League expects that this will only be a 1.9 percent increase for next year.

USE TAX COMPARISONS

2001-2002

$ 156,353

2002-2003

$ 135,548

2003-2004

$ 142,847

2004-2005

$ 158,098

2005-2006

$ 183,567

2006-2007

$ 199,431

2007-2008

$ 209,573

Exterminator

Telecommunications tax

Telecommunications is now holding and is expected to remain the same.

Previous jumps in revenue from this source were related to the city being able to raise their percentage of this tax from 1 percent, to 3 percent and finally to 6 percent. It is at its limit now, and the revenue is expected to stay the same in the next year.

TELECOMMUNICATIONS TAX COMPARISONS

2003-2004

$ 72,755

2004-2005

$ 171,447

2005-2006

$ 274,119

2006-2007

$ 495,590

2007-2008

$ 494,488

Non-home rule sales tax

Non-home rule sales tax saw a 9.5 percent gain over last year. This is the one-half cent sales tax that can be used for infrastructure. It was approved by citizens a few years ago.

Repair

NON-HOME RULE SALES TAX COMPARISONS

2003-2004

$ 47,211

2004-2005

$ 616,400

2005-2006

$ 641,186

2006-2007

$ 657,214

2007-2008

$ 719,873

Income tax

The figures here are not accurately represented due to a payment from the state that came in on May 1, one day too late to show where it should have for last fiscal year. This causes last fiscal year to show an increase of 3.75 percent, but last year is really an 11 percent increase.

INCOME TAX COMPARISONS

2001-2002

$ 1,009,896

2002-2003

$ 1,009,946

2003-2004

$ 930,122

2004-2005

$ 1,014,214

2005-2006

$ 1,167,120

2006-2007

$ 1,274,712

[to top of second column]

Medical

Furniture

Tax revenues

Plotner noted a significant jump between 2006 and 2007 food sales taxes, which didn't fit with other information. This could be because Sysco is now included in the food category.

He also noted that Wal-Mart is included in the general merchandise category. When looking at that, he reminded the council that it takes four months after a business sends in these taxes to the state before the state sends the city (or county) their portion.

ILLINOIS DEPARTMENT OF REVENUE
REPORT OF SALES TAX COLLECTIONS FOR LINCOLN, ILLINOIS

(See table below.)

DEBT OBLIGATIONS OF THE CITY OF LINCOLN AS OF MAY 1, 2008

(See table below.)

Appliances

Expenditures

Plotner reported that in the middle of May the police pension fund had reached $9,713,583. The firemen's pension fund had $7,311,644.

The savings of the two funds are invested in different ways and therefore show gains at different times, Plotner explained. The firemen's pension has two $1,000,000 annuities that at the end of their 10-year investments will be worth $2,000,000 each. The firemen's fund investments are also in CD ladders.

Tax levy for Lincoln from 2004 to 2007

In a review of taxes from 2004 to 2007, Plotner said that it shows "what I consider a very nominal increase over this period of years." These figures show a 2 percent to 3 percent increase. "That's not much of an increase, and some of that is in a non-capped category," he said.

In the next table you can see that taxes needed to pay off bonds are not capped.

A few years ago the state increased the amount of benefits that would be paid to the spouse of a deceased fireman. This also is not capped. The state allows communities to collect taxes to pay this.

Misc

However, if you skip down to the table below labeled "ALLOCATION OF 2007 TAX LEVY," you will see a correlated issue that has been a continuing concern to the treasurer. The state also sets police and firemen's pension funds, which have been increased significantly, and they are under the tax cap.

The liability to pay these funds without a tax increase makes them an unfunded mandate that's putting a burden on the community. "That's been going on for a while," Plotner said. "It's not bad now, but down the road that's going to get serious, if they don't find a way to fund those pension funds."

A look at the last table shows where the city levy goes. "It shows that 48 percent of that levy now goes to that police and fireman pension fund."

In summary, Plotner said, "It's just a matter of being able to operate the entire city, with salary increases and everything with the tax caps, and allowing you 2 percent to 3 percent increase per year, (providing) about $30,000 to $40,000 a year."

Restaurant

Concerned for the ongoing impact, he said, "How far does that go?"

TAX LEVY FOR LINCOLN FROM 2004 TO 2007

(See table below.)

ALLOCATION OF 2007 TAX LEVY

(See table below.)

Looking into the future, Plotner reminded the council of the incentive agreements made with Sysco and Wal-Mart.

Sysco

Years 1-5: The city retains the first $50,000. Sysco gets any amounts between $50,000 and $130,000; over that amount the city would get.

Years 6-20: The first $90,000 the city gets; over that to $180,000 Sysco retains; and if it were over $180,000, the city would get it.

Water

Wal-Mart

A sales tax base averaged from years 2002, 2003 and 2004 will be set. Any amounts over that base for the next 20 years, up to $585,000, will be paid to Wal-Mart to compensate them for the infrastructure that they put in.

Council members Verl Prather, Kathy Horn, other aldermen and Mayor Beth Davis-Kavelman thanked Plotner, saying, "Very good report."

[By JAN YOUNGQUIST]

Previous related articles


ILLINOIS DEPARTMENT OF REVENUE
REPORT OF SALES TAX COLLECTIONS FOR LINCOLN, ILLINOIS

CATEGORY

Liability
Collected

05-04/2005
Aug-July

05-04/2006
Aug-July

05-04/2007
Aug-July

Gen. Merchandise

$329,333

$326,975

$375,470

Food

$254,362

$282,845

$422,057

Drinking/Eating Places

$237,856

$242,600

$244,825

Apparel

$27,641

$27,203

$25,120

Furniture/H.H./Radio

$27,290

$25,297

$27,153

Lumber/Bldg. Hardware

$78,358

$86,159

$87,504

Automotive/Fill. Stations

$667,551

$651,522

$688,480

Drugs, Misc. Retail

$185,730

$172,365

$189,015

Agriculture /All Others

$143,807

$161,357

$146,646

Manufacturers

$29,647

$27,111

$26,967

NUMBER OF TAXPAYERS

636

631

615

SYSCO IS INCLUDED IN FOOD CATEGORY
WAL-MART IS INCLUDED IN GENERAL MERCHANDISE CATEGORY

2006-2008

$ 1,322.612
$ 1,413,459*** (Last distribution of Income Tax was received on May 1, 2008 which is the first day of the new Fiscal Year the check was in the amount of $ 90,847. It will have to be included in the income tax receipts for FY 2008-2009. If received on time, our income tax total for this year would have been $1,413,459.)

Another income tax distribution was received May 8 in the amount of $131,125, which is slightly higher than last year's $129,512.

 

DEBT OBLIGATIONS OF THE CITY OF LINCOLN AS OF MAY 1, 2008

General Obligation Bonds

$ 541,637

Approx. $180,550 per year thru 2010

 

Capital Projects- Fire Truck, Squad Cars, Street & Alley Dump Truck

 

Alternate Revenue Bonds

$ 387,425

Approx. $65,000 per year thru 2013

 

(Goody's and Dollar Tree)

 

Debt Certificates

$ 230,921

Approx. $33,000 per year thru 2014

 

(Sysco Land Purchase)

 

Enterprise Funds/Notes Payable

$ 8,100,216

Approx. $642,388 per year thru 2024

 

(Sewer Treatment Plant Required Update)

 

*Sewer Fees pay for the loan and operation of plant.

 

West Side Sewer Project

$302,444

Approx. $125,800 per year until total due is paid

 

*Sewer Fees pay for this loan

 

State Fire Loan

$250,000

Interest free loan from State of Illinois pay $12,500 per year until 2008

 

 

TAX LEVY FOR LINCOLN FROM 2004 TO 2007

2004

1.9% CPI

 

$ 1,273,851

Capped

 
   

Bonds

170,170

Not Capped

 
     

$ 1,444,021

Total Levy

 

2005

3.3% CPI

 

$ 1,291,351

Capped

 
   

Bonds

173,485

Not Capped

 
   

F. Spouse

19,000

Not Capped

 
     

$ 1,483,836

Total Levy

+ 2.76%

         

+ $39,815

2006

3.4% CPI

 

$ 1,335,200

Capped

 
   

Bonds

176,300

Not Capped

 
   

F. Spouse

19,800

Not Capped

 
     

$ 1,531,300

Total Levy

+ 3.19%

         

+ $47,464

2007

2.37% CPI

 

$ 1,368,588

Capped

 
   

Bonds

178,431

Not Capped

 
   

F. Spouse

20,660

Not Capped

 
     

$ 1,567,679

Total Levy

+ 2.37%

         

+ $36,379

PTELL Property Tax Extension Limited Law (Tax Caps Use Consumer Price Index)

 

ALLOCATION OF 2007 TAX LEVY

FUND ALLOCATION

AMOUNT

% OF LEVY

General Corporate

$ 24,000

1.5

Streets & Alleys

100

-0-

Police Protection

59,000

4.3

Fire Protection

125,000

9.1

Audit

16,000

1.2

ESDA

4,000

.3

Forestry

48,000

3.0

Crossing Guards

15,000

1.0

Liability Insurance

200,000

13.0

Social Security

50,000

3.2

IMRF

55,488

3.5

Public Benefits

47,000

3.0

Firemens Pension Fund

339,000

22.0

Police Pension Fund

386,000

25.0

Debt Service (2007 G.O. Bonds)

178,431

11.0

Firemen's Pension-Spouse Benefits

20,668

1.3

 

$1,567,679

 

48% of Levy for Police & Firemen's Pension Fund
13% of Levy for Liability Insurance
12% of Levy for Police and Fire Protection
11% of Levy for Debt Service (G.O. Bonds 2007)

Les Plotner
City Treasurer
May 17, 2008

[Financial text copied from report from Les Plotner, city treasurer]

Furniture

< Top Stories index

Back to top


 

News | Sports | Business | Rural Review | Teaching and Learning | Home and Family | Tourism | Obituaries

Community | Perspectives | Law and Courts | Leisure Time | Spiritual Life | Health and Fitness | Teen Scene
Calendar | Letters to the Editor