South Elgin likely to ask voters for sales tax increase in April
The South Elgin village board wants to place a referendum question on the April 2 election ballot asking voters for a 0.5 percent local sales tax increase to fund road improvements.
To be precise, the village wants to increase by that amount its retailers occupation tax, paid for items you buy, and its service occupation tax, paid when you have services done. As per state law, the increase would not apply to groceries and pharmaceuticals, Village Administrator Steve Super said.
South Elgin's total sales tax is 7.5 percent, including local, state and other taxes.
The village last increased its sales tax by 0.5 percent after voters approved a measure in 2006. That $1.5 million in revenue - plus about $600,000 in motor fuel taxes - has made all the difference in building and maintaining roads, Super said.
The total sales tax in Geneva, St. Charles and Batavia is 8 percent.
Because South Elgin is a non-home-rule community, it can increase its local sales tax only if voters give the OK. The 0.5 percent increase would generate about $1.5 million per year.
A study in September showed that village roads are rated between good and fair condition but will deteriorate if the village doesn't increase its yearly funding, which is currently at $2 million, village officials said. An increase to around $3 million would keep roads in their current condition, and $4 million would improve them.
"What we have isn't going to allow us to properly maintain these roads," Trustee Scott Richmond said.
Board members said Monday night they want to make sure voters have all the facts to make an informed choice. They agreed on a plan to create a website about the ballot question and to launch an informational campaign that will include social media and the village's newsletter.
Village officials pointed out sales taxes are paid by both residents and others, and they estimated that as much as 70 percent of sales tax proceeds come from nonresidents.
"I know people come from all over just to come to our Best Buy," Village President Steve Ward said.
Ward pointed out the increase would amount to an additional $2.50 in sales tax on a $500 TV. "It's such a small amount," he said
The village board plans to take formal action at its next meeting Jan. 7 to place the question on the ballot.
Village board members also said they want to make sure people are aware their property taxes will not be affected.
The board earlier this month approved a 2018 property tax levy of $6.575 million - $525,000 less than this year's - which is expected to result in a small decrease in property taxes for the average property owner, Director of Administrative Services Megan Golden said.