Cities have just a few tools in their toolboxes to help stimulate economic development. One such tool is Sales Tax Rebates. State Statute 65 ILCS 5/8‑11‑20 makes this possible. A recent article in regards to just such an agreement brought this to the forefront.
But why would you give sales tax back to a retailer? There are a few reasons, most of those laid out within that very State Statute. And because the State Statute exists, the problem becomes, if we don't do it, odds are another city will. One might say fine, then let them go to the next city that offers a break. Unfortunately, if we did that with every project, there would be a lot fewer projects in town and the retail sector here would be in much worse shape. Retail sales make up our largest revenue source for policing, firefighting, public works and road projects, so it's very important that we strengthen our retail sector and work to expand it. Sometimes that means utilizing a sales tax rebate agreement.
What we don't do. We don't rebate so much as to take a net loss to the City. The goal is to share the new or increased sales tax brought to the community; sales tax that presumably would not otherwise be in our City, but for the agreement that made building or expanding financially feasible.
Incentives may seem like a dirty word, particularly now, but they are something of a necessary evil. Without them, there are a lot of jobs in this community that wouldn't exist, both retail and business/warehouse/industry. Not providing any incentives to businesses and industry only assures us that our City will be the last on nearly so of everyone's choices when it comes to relocating a business or retail opportunity. Yes, the developer gets something back, but what the City and community get back in jobs and taxes far outweighs what is shared in return.
Tuesday, March 17, 2009
Wednesday, March 11, 2009
Stimulus Funds
The City of Sterling should be eligible for approximately $475,000 in road funds. However, there are a number of restrictions on those funds, and believe it or not, we may not receive them in time to use this summer. As with most things government related, strings are attached. We've had conflicting information about what roads are eligible, but we do know that not all roads will be eligible for the funds.
But road projects are just one piece of the pie. We're still hoping for other projects to be funded.
Certainly the stimulus funds weren't supported by everyone, but now that they're out there, we're working to get what we can for Sterling.
But road projects are just one piece of the pie. We're still hoping for other projects to be funded.
Certainly the stimulus funds weren't supported by everyone, but now that they're out there, we're working to get what we can for Sterling.
Sunday, March 8, 2009
My New Year's Resolution Got Away From Me....
This is a bad time of year to add something to the "to do" list. A lot of time is spent preparing the next fiscal budget (which begins May 1), and I neglected keeping up on this. Since it is budget making time, I thought it might be good to use this spot to talk a little bit about the budget for next year.
The local economy has remained steady judging by sales tax receipts coming into the City. That's not to say a few of our friends and neighbors haven't fallen victim to the nation's downturn, but we're certainly not in the situation many parts of the country are in. The City's largest problem is the revenues the State shares with us are down significantly and cities in Illinois are highly dependent on those revenues based on the way the State works. Combine that with required increases to the pension funds due to the losses on the investments and it's a serious 1-2 punch.
We're working hard to determine what to cut and how deep to make those cuts. Local government does so many things that are a part of your everyday life, that making cuts is difficult. Our budgets are also very labor heavy. Most of the expenses in the the police and fire departments are to pay for the police officers, firefighters and dispatchers that we count on. The majority of the funding in public works goes to the crews patching roads, plowing snow, cleaning up debris or to the lowest bidding contractors to repave roads. That's the VAST majority of the expenses paid for in taxes.
That gets back to why we always encourage people to shop locally. Sales tax makes up one of the largest revenues to the City, and it funds the General Fund, which funds things like the police department, fire department, public works, and road projects. If you buy the same item in Rockford or Moline, none of that sales tax makes it back to your own home community!
The other reason we encourage buying locally is it helps your friends and neighbors. The more we help each other out and the more we keep money flowing locally, the better off we can make our local community.
The local economy has remained steady judging by sales tax receipts coming into the City. That's not to say a few of our friends and neighbors haven't fallen victim to the nation's downturn, but we're certainly not in the situation many parts of the country are in. The City's largest problem is the revenues the State shares with us are down significantly and cities in Illinois are highly dependent on those revenues based on the way the State works. Combine that with required increases to the pension funds due to the losses on the investments and it's a serious 1-2 punch.
We're working hard to determine what to cut and how deep to make those cuts. Local government does so many things that are a part of your everyday life, that making cuts is difficult. Our budgets are also very labor heavy. Most of the expenses in the the police and fire departments are to pay for the police officers, firefighters and dispatchers that we count on. The majority of the funding in public works goes to the crews patching roads, plowing snow, cleaning up debris or to the lowest bidding contractors to repave roads. That's the VAST majority of the expenses paid for in taxes.
That gets back to why we always encourage people to shop locally. Sales tax makes up one of the largest revenues to the City, and it funds the General Fund, which funds things like the police department, fire department, public works, and road projects. If you buy the same item in Rockford or Moline, none of that sales tax makes it back to your own home community!
The other reason we encourage buying locally is it helps your friends and neighbors. The more we help each other out and the more we keep money flowing locally, the better off we can make our local community.
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