It’s the economy, stupid
Tax revenue, jobs, both down
Springfield city officials blame the state and the internet for sagging municipal finances.
Online purchasing, which produces no municipal sales taxes, has cut into tax collections, the city says. And the state last summer installed a fee for collecting the city’s portion of income taxes.
“There are two main problems: Consumer behavior and state action, neither of which we can control,” city budget director Bill McCarty told the city council during a September budget briefing. The budget deficit could rise as high as $11.5 million, McCarty and Mayor Jim Langfelder warn as the city council prepares to consider cuts and tax increases to balance next year’s budget.
The city largely has been silent on another truth. Employment in the Springfield area has fallen.
Through October, the Springfield area ranked sixth nationally in the number of jobs lost in 2017, according to a recent report from 24/7 Wall Street, an online business website, published last month in USA Today. With a loss of 2,518 jobs in the first 10 months of 2017, it amounts to an annual loss of $117.5 million in wages, based on the area’s average salary of $46,650 as calculated by the U.S. Bureau of Labor Statistics.
Langfelder pointed out that the metropolitan area includes Menard County, unincorporated parts of Sangamon County and municipalities other than Springfield. Still, the number of jobs in the city has fallen by 400, acknowledged the mayor, citing a recent state report.
Langfelder foresees great days in the near future.
“I’ve been around Springfield all my life,” Langfelder said after Tuesday’s city council meeting. “We’re on a positive path. Unfortunately, sometimes, people, you have those naysayers.”
Langfelder during the council meeting read a proclamation declaring 2018 to be a year of optimism. “We as a community can change attitudes and direction by turning negative mindsets into optimistic ones,” the mayor declared as he read from the prepared proclamation.
Langfelder’s optimistic streak comes as Sangamon County pushes for the creation of an economic development corporation tasked with drawing new businesses and jobs to Springfield. The mayor’s rosy picture is in stark contrast to a consultant’s report released in October by the county, which has committed $500,000 for the creation of an EDC. The consultant reported that Springfield hasn’t done enough to lure new businesses and jobs and that city discourages innovation and new ideas.
“We’re losing population,” said Sangamon County administrator Brian McFadden. “We’re losing jobs. Wages are stagnant. We’ve put all our eggs into two baskets, state government and the medical district. … At this point, I don’t see how the city doesn’t participate in the economic development corporation at some level or another.”
Langfelder isn’t a fan of the county’s report.
“You don’t want to say, like Eeyore, ‘Oh, woe is me, the sky’s falling,’” Langfelder said. “That’s why the city hasn’t grown, is because of that negative attitude over a decade. That’s what the report really says, the same-o-same-o, woe is me. What we’re trying to change is that attitude.”
The county wants the city to commit $500,000 to creating an economic development corporation, but Langfelder has resisted. The mayor questions the need to spend so much money and suggests that the existing regional planning commission could be altered to include economic development functions. The city, the mayor insists, is doing just fine, with such projects as a $20 million expansion at Levi, Ray and Shoup and a $50 million construction project by St. John’s Hospital demonstrating the city’s economic vitality.
What about the recent announcement that H.D. Smith, which employs more than 300 people, has been sold to an out-of-state company?
“The verdict’s out on that,” Langfelder answered. Better times, he predicted, will arrive within a year.
“You’ll see it in the upcoming year – you’ll see the strengths of the city,” the mayor said. “We’re heading in the right direction.”
Contact Bruce Rushton at email@example.com.