Proposed Belleville budget hikes taxes on residents

The proposed $100.8 million budget will spend millions on police and fire pensions as well as a 3 percent pay raise for city workers.

Belleville homeowners should get ready to pay more for the city portion of their property tax bills.

The Belleville City Council released its proposed 2018-2019 budget March 29, which would make homeowners pay slightly more for city services as soon as the budget goes into effect May 1.

The proposed budget comes after the Belleville City Council voted in favor of a 12 percent increase in the city’s property tax levy in December.

The Belleville News-Democrat cited a city estimate showing that a typical Belleville resident owning a $100,000 house with an owner-occupied exemption would pay an additional $58.25 in property taxes, bringing up the total city portion of that tax bill to nearly $760 annually.

Revenue from the $100.8 million budget will be used to pay for 3 percent raises for Belleville city workers and fund contributions to Belleville’s police and fire pension funds, as well as other projects.

One of those projects includes a $2 million planned improvement for Main Street. However, as the News-Democrat points out, most of the funding for these improvements ­will come from a $1.2 million federal grant – not the city. ­

Belleville’s police and fire pension funds are estimated to get $4 million each out of the proposed budget in an effort to improve the fiscal health of both retirement systems.

However, the city may be throwing good money after bad.

According to the Illinois Department of Insurance’s 2017 biennial report, the Belleville fire pension fund has less than 43 cents on hand for every dollar owed in future benefits, despite taxpayer contributions to the pension fund increasing more than 34 percent from 2012 to 2016.

Belleville’s police pension fund is in slightly better shape, having 53 percent of the funding it needs to meet future payments. Nonetheless, both pension funds would be considered bankrupt if they were in the private sector. And reform to existing debt is not a legal option, thanks to the Illinois Constitution’s pension protection clause, which even prevents future, unearned benefits from being restructured.

The only long-term solution to this growing problem is to move new city workers to 401(k)-style plans. New retirement plans could be modeled off of the 401(k)-style plan enjoyed by more than 20,000 state university workers.

However, state law mandates that towns like Belleville maintain costly pension systems for both police and professional fire departments, leaving local leaders few options.

Without real reform in Springfield, city leaders in Belleville and across the state will likely have to raise taxes and fees in order to make increasingly larger payments to failing city pension funds.

It’s already happening in Belleville.

Though the city’s property tax levy increased by $1.2 million in 2016, Belleville residents’ property taxes have been growing out of control for years. Property taxes in St. Clair County, where Belleville is located, increased nearly 53 percent from 2000 to an average of years 2009-2013.

Fees in Belleville are going up as well. Belleville City Council’s proposed budget comes only a couple weeks after Mayor Mark Eckert cast the tie-breaking vote in an 8-8 stalemate on a measure to increase fees on video gaming and liquor licenses, despite protests from local businesses, according to the News-Democrat.

Under the newly approved plan, fees on video gaming terminal licenses doubled to $200 from $100, and are set to increase to $250 per terminal by April 2019. The plan also implements a new $500 fee for video gaming terminal operator’s licenses, which were previously free.

Bars and restaurants face immediate increases in costs for their liquor licenses, too. Fees shot up to $650 from $550, and will increase to $700 in 2019. Liquor stores weren’t spared either, as the fee for a license to sell packaged liquor went up to $800 from $550. Special event liquor licenses increased to $20 from $10, and liquor license application fees tripled to $750 from $250.

Belleville’s city finance director estimates this deluge of fee hikes will raise around $60,000.

Belleville residents and businesses are tapped out. But unless real reforms to address growing debt pass the Statehouse, future tax and fee hikes are almost guaranteed.