Glen Ellyn OKs sales tax increase

Starting in July, people shopping in Glen Ellyn will pay a little more for most purchases.

Village trustees this week agreed to add a 1 percent local sales tax to the state and other sales taxes already in place, so the total sales tax paid in Glen Ellyn will jump from 7.25 percent to 8.25 percent.

The higher sales tax, which takes effect July 1, won't be applied to the purchase of groceries, drugs or vehicles.

While the Glen Ellyn Chamber of Commerce joined many business owners in opposing the sales tax increase, village Finance Director Jon Batek said the village needs the estimated $1.5 million a year in new revenue to help eliminate a projected budget deficit for next year and prepare for an anticipated rise in pension fund costs.

"The action here is intended to help solve the problems of tomorrow, not just next year," Batek said. "Ultimately, I think the best decision for the village and its future has been made."

Despite tightening spending last year, the sluggish economy continued to cause the village's revenues to decline.

As a result, leaders were facing a projected $2.6 million deficit in next year's roughly $14.1 million general fund, which pays for things such as employee salaries and operating expenses.

With the fiscal year starting May 1, officials cut roughly $1.7 million out of the proposed 2009-2010 spending plan. The cuts included eliminating the equivalent of five full-time positions. Compensation for many employees also was reduced.

Still, the jump in the sales tax was needed to help bring revenues in line with expenses. Because it won't be in place for an entire fiscal year, the higher tax is expected to generate about $875,000 for the coming budget.

Glen Ellyn was able to raise the sales tax because it has home-rule powers. Some neighboring suburbs add similar local sales taxes.

The issue was so unpopular that both candidates running for village president expressed doubts about the idea.

Mark Pfefferman, the Civic Betterment Party candidate, has said more time should have been taken to examine other options to balance the budget. His opponent, Gary Fasules, a former village trustee, said he probably would have opposed the sales tax proposal even if the vote had been delayed.

If the sales tax proposal was rejected, Batek predicted more budget cuts would have had a negative effect on the basic services the village provides.

And even with the additional revenue, he said, "We need to learn to live with less as kind of a permanent thing."