Normal's Next Budget Could Mirror Great Recession Budgets
Budget pressures faced by the Town of Normal could result in the leanest budget in a decade.
As town staff begin to craft a fiscal year 2019 budget, they're facing several hurdles to pay for programs and services: flat to declining sales tax revenue, a last-minute 2 percent sales tax collection fee slipped into the state budget costing $320,000, and $1.2 million less after Bloomington withdrew from the Metro Zone tax-sharing agreement.
"It may mirror back to what we did in 2008 when the recession hit. We may have to make some hard choices on programs," Normal Mayor Chris Koos said during GLT's Sound Ideas. "We're running pretty lean now, but may have to look at some things we're doing to bring this budget back in track."
Koos expects town staff to provide the Normal Town Council a laundry list of possible cuts. He said council members, like in 2008, may bounce the list back to staff, who Koos said has a more intimate knowledge of programs and how cuts could affect services. In addition to cuts, staff could recommend a tax or fee increase to plug budget holes.
"You know, we're loathe to look at a tax increase right now," said Koos. "Fee increases, we'll have to look, because when we assess a fee, we do it in such a way that it a break even or slightly better than break even. We like the programs to pay for themselves. A lot of them don't, they're subsidized, so maybe we'll have to look at those subsidies."
Koos called the 2 percent sales tax collection fee instituted by the state a "we need the money fee." He also cited structural problems with retail, retail sales, and the resulting sales tax collection. He said retail in the U.S. is overbuilt, stores are closing—often part of a national strategy—and increasing online sales are hurting municipalities.
"The actual face of sales tax for municipalities is going to change and it's going to change dramatically," said Koos. "Municipalities, not in the short term, but in a long-term view are going to have to rethink their revenue model and not count sales tax as the significant source it is now."
Sales taxes in Normal pay for most basic services, including police and fire protection, parks and recreation programs, some street maintenance, and snow removal.
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