DECATUR — Utility customers will continue to pay a 4.25% tax on natural gas and electricity consumption after Decatur City Council members on Monday decided to end a sunset provision that would have lowered the rate next year.
Council members voted 6-0, with an abstention from Councilman David Horn, to remove the sunset language that they had included when voting to increase the tax rate in 2015. If they had not taken any action, the tax rate would have reverted to 1.25% in 2020, a move that would have cost the city millions of dollars.
"None of us wants to raise taxes," Councilman Pat McDaniel said. "We want to keep the services, and it is going to take money to do this. I don't like it, but we have to do this."
The tax is collected by utility providers, such as Ameren Illinois, and paid to the city monthly. Last year, it brought in $4.9 million, more than double the roughly $1.5 million generated from the lower tax rate in 2015.
"The council always has the choice to sunset something," said Treasurer Gregg Zientara, who has warned the council of the upcoming sunset and its consequences in memos with his monthly financial report. "Not renewing that tax would cost $3 million minimum to the general fund."
The maximum tax rate allowed by state law is 5%. Horn on Monday proposed lowering the tax rate to 4% to help Decatur residents in low-income households, and made a motion to postpone the council's vote on the issue to allow them time to consider his proposal.
"This would be an opportunity for us to reduce this particular tax," he said. "Utility taxes disproportionately impact lower-income households, and the Decatur median household income is already lower than state and national averages."
Councilwoman Lisa Gregory questioned why Horn brought the idea to the board during the open session Monday without contacting council members beforehand. The utility tax rate was among topics that council members discussed during an August financial planning session.
Horn said the council still had time to make a decision on lowering the taxes. Zientara said that if the council did so, Ameren would need a 60-day notice so contractual changes could be made.
Noting that the council had previously discussed the issue, City Manager Scot Wrighton said an action needed to be taken on the rate so that he could present a balanced budget.
Also during the meeting, several residents spoke during public comments about the council's Sept. 30 vote not to allow recreational cannabis dispensaries and related businesses in Decatur. Most of the comments were in favor of allowing a dispensary, while others showed support for the council's decision.
Greater Decatur Chamber of Commerce President Mirinda Rothrock thanked the council members for their vote last week. She said the chamber's board of directors was in support of the council's decision to opt out.
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"We have 978 job openings right here in Decatur and Macon County and I hear from businesses every day that they cannot find individuals to take those jobs," she said. "If they can't find people to fill those jobs, then when it's time for them to grow and expand, I'm afraid Decatur and Macon County will not be on their radar."
Six council members voted against allowing the cannabis sales when recreational use becomes legal under state law next year. Horn voted in favor of allowing the dispensaries.
Residents who disagreed with the decision also stood outside the Decatur Civic Center before the council meeting in protest. Some are pushing for an advisory referendum that would allow residents to vote on the issue in an upcoming election, although the measure would be nonbinding.
"The council's decision did not reflect what the greater public wanted," said Justin Weaver, founder and co-chair of the Central Illinois Democratic Socialists. "We feel like it's been basically for one man to opt out, Howard Buffett."
Buffett, a former Macon County sheriff and philanthropist, provided funding for a $70 million drug treatment and social services campus being built in the heart of the city, near the Wabash Crossing neighborhood. Several council members cited the facility in remarks about why they voted against allowing dispensaries, saying it seemed contradictory to allow cannabis sales while supporting the construction of a multi-facility complex aimed at combating drug addiction. Buffett has said he was opposed to the legalization of recreational marijuana.
Macon County Sheriff Tony Brown and Decatur Police Chief Jim Getz also had opposed allowing dispensaries.
Most respondents to a Herald & Review online poll have expressed support for cannabis sales. In answer to the question, "should Decatur and Macon County allow recreational cannabis dispensaries?" there were 1,084 yes votes, 171 no votes, and six undecided as of Monday afternoon.
In other business, the council voted 7-0 to authorize annual federal funding to be used for city improvement and neighborhood revitalization projects such as affordable housing and neighborhood stability. The city this year received $1.5 million in Community Development Block Grant and HOME Investment Partnership funds, two types of federal grant money that are meant to strengthen communities, stabilize neighborhoods and assist people with low to moderate income levels.
City staff each year prepare an action plan designating how the money will be used. "We consciously look at those funds and allocate them to where they will be useful," said Ray Lai, the city's economic and community development director.
Wrighton said the amount the city receives changes each year.
Horn suggested that city staff clearly indicate how the grant money is used for Decatur's neighborhood revitalization efforts, noting that more than $200,000 in the plan was dedicated to code enforcement. Wrighton agreed to keep the council up to date and noted that funding for the neighborhood work also comes from other sources, including the city's general fund.
The council also voted 7-0 to provide Decatur Public Schools District 61 with high-speed internet access. The district will now be able to use two strands of city fiber which is connected to a statewide fiber network at Richland Community College. The initial term for the agreement is 20 years with an up-front payment of around $14,000, in addition to a nearly $500 annual maintenance fee.