St. Charles urges movie, booze taxes
St. Charles pitched two budget fixes they labeled "revenue enhancements," but business owners showed up Tuesday night to protest what they could see only as tax increases that would help kill their establishments.
The first is a change to the city's admissions tax. The tax is now a 10 percent charge placed on events that mainly occur at the fairgrounds and the expo center. The proposal is to cut that tax to 5 percent but apply it to a broader list of attractions including movie tickets, live theater and sporting events.
The tax would equal roughly 40 cents more on an $8 movie ticket. The new tax would create about $308,000 in new revenue for the city.
The second tax is a new 2 percent tax on alcoholic beverages. The tax would equal about $1 on a $50 bar tab, or 32 cents on a $16 case of beer. That tax would create about $893,000 in new revenue for the city.
Combined, the two taxes would reap about $1.2 million in new money. That's about twice what the city needs, at least in the short term.
The city is seeking ways to climb out of a $1.6 million budget deficit projected for the 2010-2011 budget year. That budget kicks in May 1. The $1.6 million deficit is considerably better than the $3 million deficit the city projected in November.
Since then, the city found an additional $1.25 million in budget cuts that shrank the deficit. The additional cuts make a grand total of about $6 million in expenditure reductions since 2008.
The problem is, those cuts won't be enough because not all of them are permanent. The wage freeze in place for all city employees will expire when the new budget year begins, meaning raises will come onto the books. Also, some deferred maintenance and capital projects will also add some expenses.
To compensate, the city plans to use $1 million in savings to address part of the deficit. That still leaves about $600,000 of a hole to fill - which leads to the two new tax proposals.
About a half-dozen business owners showed up at Tuesday's meeting to protest the new taxes. The majority of the businesses with concerns sell either packaged or servings of alcohol.
That includes Walter Fornek, the president of Binny's Beverage Depot. Fornek said customers simply don't want to pay a combined total of more than 10 percent tax on a purchase and will shop elsewhere to avoid it.
"I would like to say that a customer would have to drive 4 miles to save $2," Fornek said. "The fact is they just have to cross the street to go to Jewel or Meijer (in Geneva)."
Taxes: Plan could net $1.2 million