Times are tough everywhere.  Businesses are failing, jobs are being lost, personal incomes and government revenue are down.  What's the solution.  To those in DC, it means spending, spending, spending, taxing, taxing, taxing.  My History of Illinois professor this semester said that usually, how goes DC, so does Illinois.  Seems that adage transfers even to the local municipal governments as well...

Proposed Sports Complex

The Freddie/Fannie of Effingham - the Sports Complex.  We had to have they said.  We have to stay competitive with other cities they said.  The people of Effingham weren't buying it so we voted on a non-binding resolution and decided we did not want the city to build it.  But the previous City Council ignored the vote and pushed ahead.  As a result, we voted out the mayor and 3 of the 4 Commissioners - thinking that change would happen. 

So the new council got the message right?  Apparently not.  Effingham is still pushing the Sports Complex.  It's much smaller than the original plan and is supposed to have a project cap of $10 million dollars.  Of course, we are told this will not be paid for by the citizens of Effingham and all funding would come from the Hotel/Motel Tax.  But how much of our tax money was spent on feasibility studies until the previous council finally got one that jived with what they wanted to do?  As the new Sports Complex plans go forward, it has been reduced to a glorified Effingham Park District building with an indoor swimming pool, workout room, and some soccer fields surrounding it.  But in the eyes of the powers that be, if you build it they will come.  Who is supposed to come because of this project?  Tournaments.  Nevermind the fact that current cities with tournaments are very competitive to keep those tournaments in their towns and sports schedules are already busy without having to add another tournament to them.  Businesses are also supposed to come because of the "quality of living" will have been raised in Effingham.  Good paying jobs helps raise quality of living, not some building being built on a prayer and dreams.  Any questions about the Sports Complex competing with private businesses - like Draves, Get Fit or The Zone - but also the Park District are shooed aside.  So the Sports Complex would be like the Wal-Mart of Recreation?  No, we are told that the Sports Complex is different and would not be competing with anyone.  Either way, the current City Council seems hell bent on getting this thing through.  So much for listening to the constituents.  We'll remember next election.

Rosebud Theatre Bailout

Soon to be Effingham's version of the GM bailout.  Remember the slogan "what's good for General Motors is good the America"?  Likewise, Effingham seems to have adopted a similar mantra of "what is good for the Rosebud is good for Effingham".  The Rosebud Theatre has closed its doors as of December 5th despite $1.2 million spent by the City of Effingham from the Hotel/Motel Tax money for marketing.  They just couldn't make it in this economy and the big shows just could not cover the small ones losing money - coupled with the overall operating costs.  Not too mention that ticket prices kept many people without the means from buying tickets to the shows.  According to Simplyhired.com, Effingham has a median income of $26,492 and $34, 761 household median.   How does that compare to the United States?  The median income in the US, according to the Census Bureau, was $50, 946.  So Effingham's median is roughly half the US median.  That's an eerie figure, especially when you take into consideration that the official relative poverty level for a family of 4 is $21, 203. 

Setting the issue of drawing local ticket buyers aside, the City Council intends to buy the Rosebud in an effort to save it.  There has been a non-profit group established to that end also.  The original plan involved the city buying the Rosebud with Hotel/Motel Tax dollars to a sum of $3.6 million with payments stretched out over a 20 year period.  Then, the city was to lease the building to the non-profit for $1 a year so they could lower the costs of operation, and reopen the doors.  Again, no cost to the tax payer.  According to the Effingham Daily News on November 4, 2009:

 "The nonprofit entity expects to fund the theater operation, which would still venture to bring in name act, through a number of sources, including individual donations, grants and sponsorships, but most of the funding — 65 percent — is expected to come from tickets sales."

Even the President/CEO of the Rosebud Janie Oldfield, as reported in the EDN November 18th edition, said there would be no cost to the tax payer.  She continued by saying the funding would "come strictly from the hotel- motel tax fund".  I was at the city council meeting that evening and I remember being told as much.  It's even stated in the November 17, 2009 minutes available online at http://www.effinghamil.com, click on the Minutes, Ordinances, Resolutions tab to see for yourself. 

All that "no cost to the tax payer" talk lasted all but a month.  Now, the EDN reports on December 14th, that the city is considering a .5% tax on food and beverages sold in Effingham - grocery and convenient stores excluded - if they can get the General Assembly's permission to do so (Effingham lacks the authority to enact such a tax on their own).  According to Hank Stephens, Director of Economic Development, the new tax would allow Effingham to pay $250,000 per year for 20 years, otherwise, it would be cost Effingham $500,000 for two years with an option of giving the Rosebud back to the banks and then the "banks [would be] responsible for future payments".  I'm sure that the new proposed tax has nothing to do with the $2 million the city borrowed to "balance the budget", but we'll get to that in a little while.

Oh but wait!  Due to local outrage about the new proposed tax, the buck has already been passed to the non-profit Arts Connection of Central Illinois - the group who will run the Rosebud once it reopens.  The Effingham City Attorney Matt Hortenstine now says it will be up to the ACCI to "spearhead" the effort and getting the necessary legislation passed.  The rationale behind the new tax?

Supporters of the food-and-beverage tax believe it makes sense because the restaurants and bars are beneficiaries of the Rosebud Theatre — patrons of the theater often will eat out at restaurants before shows and will visit a bar after a production.

Ok, so the attendees might visit restaurants, but what about the Everyday Joe Citizen of Effingham taking his family out to dinner on Friday night?  He'll be paying the tax also.  Which bars are the supporters pointing to near the Rosebud?  Buffalo Wild Wings?  TGIFridays?  Hilton Garden Inn hotel bar?  There are no real bars at Exit 160.  They're all downtown, on North Route 45, or on the southside of Effingham.  Not only is it a tax on the people of Effingham, but it is also a tax on doing certain types of business in Effingham because ultimately, the restaurateur and bar owner will have to pony up the tax.  The supporters claim for every $10 spent, the tax will equate to 5 cents.  It doesn't matter whether it's 5 cents or 5 dollars!!!  A tax is a tax is a tax.  We were told it would not cost the tax payers a dime.  Why is the Rosebud going to cost the tax payer? 

"With other projects already slated for use of hotel-motel tax funds, there is not enough remaining in the hotel-motel tax account to sustain payments over 20 years to purchase the Rosebud building, according to Economic Development Consultant Hank Stephens. "

And we're supposed to trust many of the same people pushing the Sports Complex that it too won't cost the taxpayer a dime?  I was born at night, not last night thank you very much.  Our memories aren't short either, we'll remember next election.

Keller Convention Center Bailout

More corporate welfare brought to you courtesy of the Effingham City Council.  Mr. Keller owns a couple of hotels at Exit 160 in Effingham and he wants to expand his convention center in order to bring bigger and better conventions to his business.  But he wanted the city to foot the bill for his renovations.  I was also at this city council meeting and saw the presentation given to the city council.  The math was fuzzy, and the whole concept was built around the Field of Dreams mentality.  Mr. Keller wanted the money paid into the the Hotel/Motel Tax refunded to him, plus money from the TIF district to help cover costs.  Of course, the city council was all ears.  Just mention Hotel/Motel Tax money being spent and they get that Chris Matthews tingle up the leg feeling.

The Effingham City Council voted to allow $1.35 million from the TIF district to be used in helping Keller build his new hotel, and revamped convention center.  First and foremost, the convention industry is struggling.  The city supported convention center in Collinsville, Illinois is a prime example of the struggles of the convention business.  Second, Patty Greene, director of the Keller Convention Center says:

"According to Greene, the convention center has had to turn away some events because it was not large enough to hold the number of people involved in the event."

Bringing bigger conventions and being told they will move are two different things.  I was at the city council meeting when she had given her original presentation about the convention center.  She said that she was approached by conventions that said if the hotel and convention center was bigger and better that these "bigger" conventions would move to Effingham.  I have to disagree with Patty Greene in a big way, and it comes from personal experience.  I used to be on the staff and steering committee for Model United Nations St. Louis.  We drew at least 500 students, plus faculty every year to the Hyatt Regency Union Station St. Louis.  We were in the final year of our contract and the Millennium Hotel St. Louis was trying to woo us away.  We toured the facility and were very impressed.  However, we stayed with the Hyatt because there was little to nothing to do around the Millennium whereas the Hyatt had food, entertainment, and a Metro station onsite allowing access to most of St. Louis.  Talking with a local conventioneer who attends a very large agricultural convention, he told me that they had considered moving to Effingham, but the size of the convention center was not the issue.  It was the lack of things to do in Effingham once conventioneers are here that kept my source's convention out and I imagine others as well. 

"According to Greene, when conventions fill up hotel rooms at the Hilton Garden Inn and the Holiday Inn Express, guests who need a room are sent to other hotels in the city."

This is a stretch at most.  She needs to amend her statement to say hotels at Exit 160, not Exit 159.  I work at a national chained hotel, and I can tell you that the overflow currently from the Keller Convention Center does not get to our hotel.  In essence, this deal benefits one business, one area of town.  Meanwhile, the other hotels do not get to access TIF funds to renovate or expand in a down economy.  The hotel business is slow, period.  Less people are traveling and I'm sure the Hotel/Motel Tax funds reflect this decline - refer back to Hank Stephens quote earlier in this article.  Unmentioned in the Effingham Daily News articles is whether Keller will be getting his Hotel/Motel Tax refunded as well.  Either way, we'll also remember this bailout at election time.

Overall Concerns

First, Effingham keeps spending the Hotel/Motel Tax money like it's going out of style.  Eventually, like it has already been stated, this fund will run dry.  How much money is in this account?  It needs to be made public along with obligations proposed or enacted from this account.  Second, how much money is in the TIF account(s)?  $1.35 million to Keller, $1.35 million borrow by Effingham.  The status of this account(s) should be available to the public as well. 

Second, Effingham needs to address their budget shortfall through cuts in the budget.  In August, Effingham posted a $2.3 million deficit.  The budget was "balanced" by borrowing money from the working cash levy and the TIF account.  How you can balance a budget via borrowing?  At the last city council meeting I attended, Commissioner Flach proposed several budgetary cuts which was looked at with scorn by some of the other commissioners and the cuts were even called "Scrooge-like" by Mayor Lange.  If anything, I have definitely crossed the line to supporting a city manager so that the budget is handled through independent person.  I just question whether all this spending is wise in an economy such as this coupled with slowly dwindling revenues. 

Finally, the city council seems to place more emphasis on promoting one part of town over another.  I don't have any qualitative data to back this up, but I can see where projects are proposed and which parts of the city are in the process of gentrification.  Anything north of Fayette Ave or the Union Pacific Railroad - Exit 160 especially - is promoted.  Exit 162 is starting to get the same attention, but it'll be years before it looks anything like Exit 160.  South of Fayette Ave/UP R.R, business is struggling starting with the Village Square Mall.  Just take a drive and come into Effingham from the west on I-70 or from the south on I-57 and you will see a completely different looking Effingham than if you drive from the north on I-57 or from the east on I-70.  From the north or east, Effingham looks like a bustling town, from the south or west, you would think it is a town on the decline. 

Proponents of these projects or bailouts I have outlined claim that Effingham needs these things to be competitive with other cities to draw businesses, and the rise in the quality of life benefits all.  If that were only true.  Would it not be better to show businesses that Effingham has a truly balanced budget and maybe even a surplus to boot?  Would it not be better to show that Effingham is financially stable, therefore Effingham would be a great place to build or expand?  Haven't we learned from others - the United States Congress - that you cannot spend your way into prosperity?