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Joliet looks at higher taxes, fees

Proposed 2020 budget projects $300,000 deficit despite new revenue

The proposed 2020 Joliet budget would hike gas and hotel taxes, increase the cost of building permits, and create a new registration fee for contractors.

That’s not all, however. Whether they all go into effect depends on whether the city council signs off on the full budget presented by staff on Tuesday.

Mayor Bob O’Dekirk blasted the gas tax. Councilman Larry Hug suggested he’d opposed tax and fee increases. But most of the council was silent.

Joliet also is headed toward an $11 million deficit by the end of this year, the city finance director said. Even with
$8.5 million in new or higher taxes and fees, staff is projecting a $300,000 deficit in the general fund, which pays for most daily operations.

The next workshop meeting on the proposed budget is Dec. 11.

Here are the proposed revenue enhancements:

Gasoline tax

A hike in the gasoline tax was proposed last year but removed before the council voted on the 2019 budget.

Hints of another proposal came this year when Councilwoman Sherri Reardon spurred a small political storm by saying she could support a 1-cent increase for a vehicle replacement program.

Now, staff is proposing a 3-cent increase in the city share of gas taxes from what now is 1 cent to 4 cents.
The higher tax would generate an estimated $1.8 million a year, which is proposed for vehicle replacement.

Hotel tax

The city hotel tax would increase from 7% to 10%, generating an estimated $1.2 million in new revenue.

Advocates for the Rialto Square Theatre have suggested a higher hotel tax as a dedicated funding source for the theater. However, there was no indication on Tuesday that higher hotel tax revenue would go anywhere but to city coffers.

Property tax

Finance Director James Ghedotte said the city would maintain the same property tax rate it has now but expects to get nearly $1.9 million more, or a 4.9% increase. The added revenue would come from new development and increased property values, which would generate more tax money for the city.

Joliet in past years has maintained the same property tax rate to collect more revenue from the growth of property value in the city.

The city expects to get $39.2 million in property taxes in 2020, which is the second-biggest source of revenue for the general fund behind sales taxes. Property taxes account for 20% of general fund revenue.

Cannabis tax

Ghedotte is estimating $250,000 from a city tax on recreational marijuana sales, an amount much lower than what was suggested in October when the City Council approved a 3% tax.

Ghedotte acknowledged estimates have been as high as $1 million.

“We’re not really sure about that,” he said.

Contractor fees, building fees

and real estate fees

Contractors would be required to pay a $200 fee to register with the city and $150 to renew registration, a new fee estimated to generate $585,600.

The cost of building permits would increase from the current level of
$6.25 per $1,000 of construction value to $10 per $1,000 of value. The fee increase would generate $722,000.

Fees charged for a variety of permits for signs, driveways, fences, sheds and above-ground pools would increase and generate $162,000. A new registration fee for foreclosed properties is expected to generate $200,000.

Garbage collection

The garbage collection fee is going up 2.4% to match the $336,000 increase in charges Joliet will pay Waste Management in 2020.

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