Evanston residents hoping to tighten their purse strings in 2027 may be out of luck, unless City Council members are able to find a solution.
City staff proposed a budget that includes an 8.9% property tax increase, in addition to a 25% water rate increase and added costs to basic amenities like natural gas use and garbage collection, according to information presented at the Oct. 12 City Council meeting.
Higher taxes on non-essential services like streaming and rideshare apps are also on the docket, according to officials.
But Council members pushed back on the proposed tax increases, telling staff that the city needs to take a harder look at reducing expenses before asking for more money from local residents, even if that means cutting personnel.
The draft budget is slated for final City Council approval prior to the Thanksgiving holiday. Evanston’s 2027 fiscal year runs from Jan. 1, 2027 to Dec. 31, 2027.
The extra revenue in the proposed budget would primarily support the Parks and Recreation Fund and address dwindling reserves in Evanston’s General Fund, City Manager Luke Stowe’s office said.
Evanston is also boasting a $100 million Capital Improvement Plan for next year. It aims to replace nearly 10,000 lead service lines, which bring water from under-street water mains into homes, among other transportation and facility upgrades.
More Top Picks Bulbs Falls
“The proposed FY 2027 budget represents an important step toward strengthening the city’s financial position while maintaining essential services and addressing significant infrastructure needs,” Stowe wrote in a letter to City Council members Oct. 6.
The proposed city budget for next year contains $349 million in expenditures, which is up 2%, or $6.9 million, over last year, excluding operating transfers out of the balance, city data shows.
Stowe said that the largest cost increases have come from places like the city’s Grant and Insurance Funds.
Insurance Fund costs have risen due to increasing health insurance expenses for city employees. Those expenses are projected to rise by approximately 17% next year due to several factors, but most notably increased utilization of GLP-1 medications.
The city plans to use what is likely the last of its remaining funding reserves to balance its General Fund for 2027. That fund is projected to have a roughly $6 million deficit, according to Hitesh Desai, Evanston’s chief financial officer.
Desai told Council members Monday that next year’s projected deficit in the General Fund is a decrease from prior years. For the last three, the deficit has sat at around $10-12 million.
That’s in part thanks to a 6.6% increase in total revenue for the fund, coming from economic inflation and tax rate increases for residents in the proposed 2027 budget, if the plan is approved as is, Desai said.
Stowe said the proposed property tax increase would translate to about a 1.7% increase in total property taxes for local homeowners, or about an $180 annual increase for a $481,000 home, the median market home value in Evanston.
But the fees won’t end there, the city’s finance team told Council Monday.
Residents can expect the tax on their streaming service subscriptions from platforms like Netflix, Hulu or Disney+ to increase from 5% to 10% in 2027, in line with Chicago’s imposed tax rate, according to the proposed budget.
Evanston would also raise its rideshare tax on apps like Uber and Lyft from $0.20 to $0.50 per ride for trips originating or ending in the city.
Local residents’ natural gas use tax would double from $0.025 to $0.05 per therm to “better align with neighboring communities” and a 5% increase to waste pickup fees and $0.05 increase to grocery bag tax would be applied.
Residents could also face a 25% rate increase on their water usage to “support planned infrastructure investments and associated financing costs,” according to Stowe.
During discussion of the proposed budget, Council members pushed back on the added fees, noting the plan relies too heavily on taxpayers without looking enough at additional sources of revenue.
“I understand for the purposes of what [the finance team] does and what we do to look at peer communities [for setting tax rates], but I think that residents are going to look at what costs them more in 2027 than it cost them in 2026,” said Ald. Tom Suffredin, 6th.
On the contrary to hiking taxes, the city should be looking first at what staffing roles are non-vital to the functioning of day-to-day operations, elected leaders argued Monday.
According to Michael Van Dorp, a senior financial analyst for the city, about 80% of expenses within the General Fund are “tied to people.”
“We talk about cuts and trying to find efficiencies within the General Fund, [but] it’s very hard to do so without also talking about staff decisions,” Van Dorp said.
“This is not the budget I was hoping that we would see,” said Ald. Matt Rodgers, 8th.
“I think that when we look at what our expenses are and how they have grown in the past five years, it’s been greater than inflation several times over… I recognize that our largest expense is people, and people are important…but we are also asking 78,000 other people (Evanston’s population) to pay for those people at a higher rate than we have been.”
Rodgers noted he’d like to see the city’s finance team take another “good hard look” at expenses and work to find other ways besides increased taxation to make up the deficit.
“We cannot as a default keep coming back to the taxpayers for more money,” said Ald. Clare Kelly, 1st, following the budget presentation.
“People are leaving the city and we need to tighten our belts…I think we really need to see significantly more efficiencies, including looking at some of our top-paid employees, and even considering reduction in salaries across the board at the very top levels.”
CFO Desai confirmed Monday that the initial budget proposal planned to cut seven full-time employees’ jobs next year, but some Council members argued that may not be enough.
“I don’t know if we have to cut some of our programs,” Ald. Krissie Harris, 2nd, told Desai.
More Top Picks Best Mattresses For Side Sleepers With Shoulder Pain
“When we tell somebody else to tighten their belt, we all have to do that…We’ve got to dig a little deeper on our side because you have to have heat, water and property, right?”
The only Council member who diverged was Ald. Bobby Burns, 5th, who defended the city’s staffing numbers, saying that a majority of the positions created within the last two administrations have tried to get Evanston “back to a point where people don’t feel like they’re wearing multiple hats and overworked.”
“I don’t think this Council has done a good job providing the city manager with direction on how to reduce employees, and I say that because I don’t think it’s the city manager’s responsibility, as one example, to recommend employee reductions that are going to have significant impacts on service delivery.”
Council members will continue to deliberate at their next meeting Oct. 26.
Officials said Monday a tentative final budget approval date is set for Nov. 23.