Joliet revenue grows faster than expected
By Bob Okon email@example.com October 17, 2013 8:30PM
Updated: November 19, 2013 6:32AM
Joliet is getting more revenue than expected this year thanks to sales tax income and, believe it or not, more timely payments from the state.
The city council’s finance committee got the good news this week, and some council members suggested that the city’s financial condition has improved enough to look at hiring an economic development professional to bring new business into Joliet.
Gambling tax revenue continues to decline, which it has done since the Great Recession struck in 2008. But city finance director Rachel Mayer told the finance committee that “most revenues are either doing better or are in line with what we anticipated.”
The positive outlook comes as city officials begin preparing the budget for fiscal year 2014, which starts Jan. 1.
Revenue for the general fund, the main operating account, is expected to be $164.1 million this year, which is $5.8 million more than the budget estimate, Mayer said. The general fund pays for police, firefighting and most city services.
The forecast for 2014 is $163.6 million for the general fund, down about $500,000 from what will be received this year.
Joliet has seen big growth in sales tax income since 2011, largely because of last year’s hike in the city sales tax. But Mayer said increased business, especially from auto sales, also has kept sales tax revenue growing in 2013.
Year-end sales tax income is expected to be $42.7 million, $2.9 million more than what was budgeted for 2013. Two years ago, Joliet collected nearly $34 million in that revenue.
“There is some concern that the increase can’t keep going at that rate, so there will be some leveling off,” Mayer said.
Even so, the city expects sales tax revenue to grow next year to $44 million.
Revenue this year also was boosted by the state sending Joliet its local share of state income tax revenue on a more timely basis, Mayer said. The city’s cut is expected to total $15.2 million, which is $2.5 million higher than what was budgeted.
State income tax payments to the city had been a sore spot in recent budgets. Not only was the state lagging in the payments, but Gov. Pat Quinn had talked about the state giving towns a smaller share of that revenue. That never happened.
Mayer said gambling revenue remains the “one source of revenue that seems to keep declining.” Joliet expects to end 2013 with $20.2 million in gambling revenue, below the budget estimate of $20.9 million. The city projects gambling tax income to drop again next year to $19.3 million. Two years ago, Joliet took in nearly $22 million in gambling revenue.
Mayer said the city’s share of video gambling revenue has grown rapidly since it started up a year ago, but it’s a lower-volume business than casino gambling with a smaller city tax. Joliet will end this year with about $120,000 from video gambling and forecasts that to increase to $180,000 next year.
The overall forecast is rosy enough that council members talked about creating budgeting a salary for a new economic development position.
“We really need someone to go out there and start shaking the trees for some economic development,” Councilman Jim McFarland said.
Councilman John Gerl suggested that the city reinstate the post of deputy city manager, which has been vacant for several years as the city has cut costs to balance its budgets.
“Quite possibly our deputy city manager could have a background in economic development,” Gerl said. “I think a deputy city manager is needed as well. Maybe we can combine the two.”