By Eric Stock
BLOOMINGTON – Now that Bloomington has raised its sales tax rate by one percent starting in January, city officials hope they can find their way out of a projected $7 million shortfall by then.
City manager David Hales told WJBC’s Scott Laughlin city staff plans to put recommendations from the city’s budget task force in the form of resolutions for the city council to consider in the coming weeks, which Hales acknowledged is unfamiliar territory for the council.
PODCAST: Listen to Scott and Colleen’s interview with Hales on WJBC.
“There hasn’t been a track record of the council looking and saying ‘We’re not going to going to this anymore, we’re not going to do that,’ ” Hales said. “Even the rental inspection program is one of those where we are only providing mediocre service because we’ve had to cut back on inspectors.”
The task force has recommended include slashing $250,000 from the Bloomington Center for the Performing Arts, halting funding for the school resource officers and suspending ramped-up payments for police and fire pensions.
He added the city will now start setting spending priorities as it looks to close a deficit.
“We don’t even begin collecting the sales tax revenue until Jan. 1, 2016, so I do believe over the next three to five months, the council will get a much clearer picture of what the budget is looking at,” Hales said.
Hales noted rising labor costs forced the city to find new revenue streams for street resurfacing. Street and sidewalk improvements are set to get one-fourth of the new revenue from the tax hike. Half of the money, about $4.8 million, is to go toward the city’s deficit. The remaining 25 percent will go to mental health to help the county build a mental health facility to aid mentally ill inmates.
Tax impact
The sales tax increase of one percent will increase the rate for general merchandise to 8.75 percent. Packaged liquor would rise to 12.75 percent. Eating at a restaurant would increase to 10.75 percent.
Services that would be unaffected by the sales tax increase are amusements (including movies, concerts and sporting events), groceries, hotel stays and vehicle purchases.
Eric Stock can be reached at [email protected].
