Bloomingdale approves new phone tax

Bloomingdale residents will notice an increase on their phone bills after July 1.

The village board Monday approved a 5 percent telecommunications tax, aiming to fix a projected $1.7 million budget shortfall for the next fiscal year.

The tax would apply to the gross amount of bills for mobile phones, land lines some Internet services and other services, such as pagers.

All board members except Trustee Robert Czernek voted in favor of the measure.

Officials say the tax is expected to generate $1.5 million annually, bridging most of the gap between Bloomingdale's $22.9 million spending plan and $21.2 million in expected revenues. They said several factors, such as falling sales tax revenues and flat property tax income, are causing the disparity.

Finance Director Gary Szott said Bloomingdale was reluctant to add the new tax.

"By all means, if we had other alternatives we wouldn't be implementing this," Szott said. "I think the truth of that shows because we have had the ability to pass this tax for quite some time and we're just doing it now."

Sales tax is Bloomingdale's primary source of revenue, but it has been declining over the past two years. Szott said the village was hit particularly hard when Insight, a mail-order computer company, moved out of town.

How the new tax will affect residents depends on what services they use. In addition, Szott said individual retailers administer the tax, while the state of Illinois monitors the process. Then the state remits the amount collected to Bloomingdale.

"The way it is applied is contingent on how the individual's service providers are assessing it," Szott said. "It's not straightforward. I wish it was."