Friday, June 17, 2016

Food and Beverage Tax

In the days leading up to the City Council meeting where the proposed Food and Beverage Tax was to be discussed and voted upon, I did considerable research on which cities in Illinois already had such a tax in effect.  The research revealed that at least 31 cities in Illinois collect such a tax, including Mt. Vernon which has had a 1% tax on all prepared foods and beverages since 2008.  All 31 of these cities have a food and beverage tax of 3% or below, with 18 having a 1% tax.  Bloomington, Normal, and DeKalb, all university towns, have a rate of 2%.  I sent the information from my research to the City Manager and requested it be shared with the rest of the Council and Mayor in our Weekly Packet prior to the meeting, which it was.

I had hoped we would institute a tax no higher than 2% (actually preferring 1%), but ended up being in the minority opinion of the council and mayor.   At 4%, and with the other state and local sales taxes, we now have one of the highest taxes in the State of Illinois on meals.
I have also believed from the beginning it was only fair that all businesses that sell prepared foods and beverages be required to collect the tax, not just restaurants, bars, and hotels as was passed in the ordinance.  Having all businesses that sell prepared foods and beverages collect the tax, like in Mt. Vernon, should provide additional revenues where we could investigate possibly lowering the tax rate from 4%.  Comments and input are welcome on this topic, as we further refine the details of the recently passed ordinance before the tax goes into effect.

While we all would prefer not to have to raise taxes, the truth of the matter is that State of Illinois mandated funding of municipal police and fire pensions have forced cities throughout the state, including several here in southern Illinois, to find new or increased sources of revenues.  Illinois cities must have their police and fire pension systems 90% funded by the year 2040.  Carbondale and other downstate cities have quite a way to go to meet this mandated policy and are exploring various avenues to secure the needed funds by the deadline.

Through recent studies and meetings, like the Downtown Carbondale Redevelopment Plan, residents and officials from both SIU and SIH have voiced the need to revitalize and spruce up the Downtown Carbondale area, as well as the major entryways into the city.  A more attractive Carbondale assists in the recruitment of students, faculty, staff, and medical personnel.  Part of the new tax revenues will be utilized for that very purpose for projects, like streetscaping and a new Multi-Modal Center to replace the outdated and undersized Amtrak station, to achieve redevelopment goals.  Some people view a tax as just a tax, but in this instance, it is a means of reinvesting in your community and making needed improvements.