Budget woes explained: Moline dropped the ball

It doesn't take a rocket scientist to realize that the city of Moline has given away the farm to insiders and developers for a long time, saying it would pay off down the road. Where did all the promised income go?

In his opinion piece in the Dispatch first published Oct. 18, ex-Moline aldermen and former president & CEO of Renew Moline Rick Anderson explains that the city's present financial deficit didn't need to happen.

The whole situation is a textbook example of what happens if you follow the Republican playbook for managing public dollars. You give it away to the wealthy since you believe that they're the only ones worthy of it, and you actually believe that "trickle down" econonics is a valid theory, despite the fact that it's failed over and over and over again. So you hand the money to the wealthy and then you sit back and try to figure out who to blame when the ridiculous "trickle down" plan goes south, though in this case, it seems that they simply failed to adjust the tax formula to capture the extra revenue.

City dug this tax hole

Once again the City of Moline is facing a revenue-expenditure dilemma. Sadly, it didn't have to happen.

Basics First: The city's portion of our property tax bill provides a large percentage of the city's revenue. The amount we pay in city property tax is determined by multiplying our property's assessed value times the percentage rate.

(Property Value) times (Percentage Rate) = Total Amount Paid or Collected.

Some history: For many years the Moline City Council determined the percentage rate for property tax that was to be collected every year needed for the budget. Sometime in the 1970’s they changed to determining what the total amount of property tax was to be collected. They did this because people said that their property taxes were increasing despite the fact the percentage rate was staying the same. But this was because property values were increasing (something most of us only want to have happen when we sell our property!) and development was occurring to previously undervalued property, not because of the rate.

Since that change, the public perceives whether or not their property taxes are being increased to whether the total amount to be collected is being increased. In actuality over the years the percentage rate has gone down in more cases than not!

So what's the difference? The difference is that when the city council lowers the amount to be collected, they are not, in essence, benefiting from all the development and redevelopment of property within Moline in recent years. That has been a big mistake!

The telling statement in the information provided the city council by current City Administrator Lew Steinbrecher is: "If the city had simply maintained the same tax rate that was levied in 1993. This would have prevented the financial dilemma currently facing the municipal treasury."

Moline has been the envy of hundreds of small cities like ours who wish they could enjoy a redevelopment program like ours. They see it as a potential income stream that doesn't affect their current taxpayers. But Moline hasn't let itself benefit from its redevelopment program as much, financially, as it should have because it has been unwilling to collect the additional revenue development has made available.

Part of the suggested solution Mr. Steinbrecher suggests is to adjust the property tax rate to a rate which is still less than it was in 1993 in order to regain some of the revenue that was lost in the years since then. I support that. And then I believe that rate should be kept in place so that the city and its residents can benefit from current and future development of property.

As I have said before, if we, the citizens of Moline, through our representatives at city hall, don't collect the additional revenue that development and redevelopment projects bring to the City, then why encourage redevelopment? We haven't collected that "development" revenue for some time and now we have a dilemma we shouldn’t have.