How Much Money Should Crystal Lake Keep in the Bank – Part 2

Yesterday, I explained how a local government dependent on property taxes could reasonably argue that it needed to keep a bank balance high enough to allow it to get from the end of its fiscal year to when real estate taxes are distributed in May and June.

But the City of Crystal Lake collected under $1.8 million in property taxes in 2007. You can enlarge the image by clicking on it.

That’s out of over $18.5 million in total revenue for its general fund accounts.

So, less than 10% of Crystal Lake’s city revenues come from real estate taxes.

$150,000 a month.

Virtually a rounding error. Certainly no justification for keeping a $15-$17 million end of year balance in the bank or to raise city sales taxes by 75%.

Then, there’s the $11.2 that came from sales taxes. Checks come every month.

Again, no reason to keep a $15-17 million bank balance or to raise city sales taxes by 75%.

Over $3 million came from month checks resulting from the city share of the state income tax.

Regular payments, so no justification for an end of year balance.

And, another big item, telecommunications’ taxes brought in $1.9 million, again, deposited monthly. No need to accumulate money to wait until one or more lump sums showed up.

Look closely at how much revenue was collect in comparison to the amount expected.

Add the bottom two lines of this page from the 2007 audit together

$900,000 more was collected than predicted to be raised.

So, what is the justification for keeping almost 75% of a year’s budget in the bank?

And, what is the justification for Mayor Aaron Shepley’s and his city council majority having raised the city sales tax by 75%.

When a government has more money than it needs, taxpayers ought to ask

“Why are we being overtaxed?”

Certainly, conservatives think individuals can better decide how to spend the money they earn than governments.

I am under no illusion that many, if any, Crystal Lake taxpayers are willing to spend any time taking on an overtaxing city hall.

But, I did think readers ought to be able to see what’s not in the city’s financial records to justify Mayor Aaron Shepley’s 75% city sales tax increase.

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