From AP - News Headlines -

Urbana City Council Passes City Budget, Discusses Motor Fuel Tax

Less revenue, less spending, and more vacant positions are features of the budget approved by the Urbana City Council Monday night.

The$ 48 million budget avoids any staff layoffs by leaving seven positions vacant, and by freezing salaries --- although contract negotiations with city unions are still in progress. It also relies on six million dollars in city fund reserves to fill the gap between city spending and projected tax revenues.

In introducing some last-minute revisions, Mayor Laurel Prussing says she had some good news from city Comptroller Rod Eldridge. According to the mayor, "Ron Eldridge says that even though our revenues are going to be down a little bit more for this year, our spending is going to be down even more. So we're going to have more of an ending fund balance than he originally anticipated."

The budget passed on a 5 to 2 vote.

Meanwhile, Urbana council members had mixed opinions during their first discussion of the mayor's proposal for a city motor fuel tax.

Republican Heather Stevenson says the mayor's tax would simply send motorists to Champaign to shop for gasoline --- and they might shop for other things as well.

"If I can save it by going across Wright Street, then I might as well continue to go and spend the money that I've saved, not spending money on gas in Urbana, at the shops in Champaign", says Stevenson.

But Mayor Prussing says a two-cent motor fuel tax would hardly be noticed amidst the ups and downs of gasoline prices.

"Two cents per gallon - the price fluctuations are much bigger than that", says Prussing. "You see 20-cent differences in prices per gallon, so I think two cents is very small."

But Prussing says a 2-cent tax would be enough to bring in another $500,000 a year for the city to spend on improving its streets. Urbana already receives money from a state motor fuel tax, but the mayor says that revenue hasn't kept up with rising costs. Prussing says she'll have her staff do more research on her gas tax proposal, and come back to the council with information on other small cities with motor fuel taxes.

Categories: Government, Politics