EAST PEORIA — For the 18th consecutive year, and this time with a $1.3 million budget deficit on their minds, the members of the East Peoria City Council voted 3-2 on Tuesday not to increase the city portion of the tax levy.

"Not until I have been assured that we have examined new efficiencies of operations and cut everywhere that we can cut, will I support any kind of a tax increase on the taxpayers of East Peoria," Commissioner Gary Densberger said after Tuesday's vote.

Since 2000, the city portion of the tax rate has been around $1.21 cents per $100 of assessed property value. In 2000, the rate was $1.23. Last year, it was $1.23. With Tuesday's vote to maintain the rate, it will be vicinity of $1.23 in 2018.

Commissioners Dan Decker and Tim Jeffers voted against the flat tax rate. Mayor Dave Mingus and commissioners Gary Densberger and John Kahl voted for it.

Jeffers and Decker have both recently supported a .5 percent sales tax increase to help narrow the deficit, but that tax increase was also defeated by the same 3-2 vote.

"I would be glad to support (the flat property tax rate) had we supported the sales tax increase, which I think is a much fairer tax," Decker said. "But right now we don't have enough money. We are not meeting the needs of the city, and it is going to cost us many more dollars in the future."

The council had two tax options Tuesday: Keep it flat with no increase, or increase it by the rate of inflation, something it has not done in 18 years. A 2.639 percent inflationary increase would have raised an additional $144,172 and cost the owner of a property valued at $150,000 an additional $14.43 a year. Since 2000, the Consumer Price Index, the measure of the rate of inflation in the United States, has increased a cumulative 39 percent in the same time the city property tax rate has increased zero percent.

"(The inflation increase) is really not a high dollar amount for most of our residents," Jeffers said.

In other action, the council approved a $2.5 million loan from the Morton Community bank to pay the costs of an early retirement incentive plan that 22 employees accepted during the last two years. By getting the loan from the private bank at a rate of 2.15 percent instead of from the Illinois Municipal Retirement Fund at a rate of 7.5 percent, the city saves $360,000 in interest over the course of the five-year loan. Commissioner Decker said the payback on the early retirement incentive plan would come after about five years.

Commissioner John Kahl opposed the incentive plan from the beginning, and opposed the loan Tuesday night.

"We're not saving money (with a lower loan rate)," he said. "We're spending money we don't have."

Scott Hilyard can be reached at 686-3244 or by email at shilyard@pjstar.com. Follow @scotthilyard on Twitter.