Lately, I could forgive someone for a wandering attention span. The feds are discussing a tax reform package that could have a profound impact on our businesses and our livelihoods. The House passed the Tax Cuts and Jobs Act on November 16, and the Senate is considering a similar bill but with significant differences.
This a serious effort with a variety of nettlesome issues, but at it’s core this is an opportunity to make our federal tax code competitive and to spur growth in our economy.
Appropriately, there will continue to be significant coverage as the Senate move toward passage and the two chambers potentially work to reconcile their two bills. I tweet frequently about these issues and encourage anyone interested to follow @ColinDalough for more information as this process moves forward.
However, at the local level the City Council is considering the City of Naperville’s budget and I would argue that the impact on local businesses and residents is just as meaningful and deserves our full attention.
At the time of writing, the City Council has had two budget workshops, and at the conclusion of the second the City Council provided some illuminating direction to city staff on the next steps they’d like to see in the process.
Essentially, City Council asked City Manager, Doug Krieger, to come back with a 1% non-capital reduction which would still leave an approximate 2.2 million delta between current projected costs and revenues.
Simply put, that’s a big gap to close. I applaud City Council for asking for a further 1% reduction but I ask, why stop there? When proposing the Home Rule Sales Tax increase, City Staff provided three scenarios and their corresponding impacts.
My humble recommendation is to do the same on cuts to balance the budget. What cuts would be required to fully balance the delta, to cover half the delta, and then at a 1% reduction? Let’s put all options on the table.
We should include in that cornucopia of options Councilwoman Obarski’s suggestion to consider the possibility to finance some portion of the pension obligation. That’s an unwieldy sentence and I’d like more information on any potential proposal, but the idea is worth consideration. Interest rates won’t get much cheaper, Naperville has the best credentials that a community could have, and the rolling pension methodology will likely mean that the pension obligation won’t ever be higher than it is right now.
I’m sympathetic to the problem of the City Council. They didn’t vote on the state budget and it’s corresponding rate hikes on corporate and individual taxpayers. But adding to the increased tax burden won’t help alleviate the problem either.
City Council is not sleeping on this issue. Earlier in the process, Councilman Coyne pushed hard to consider staffing consolidations between the library, Naperville Settlement, and the City that could lead to additional savings. Does each institution need HR and finance functions or would consolidation lead to savings? This proposal won’t likely bear fruit in 2017 but it’s idea that is certainly ripe.
And that is ultimately the point, let’s put all the options on the table before any potential tax increase, service cuts included.
Director, Government Affairs & Business Development