Gurnee, Vernon Hills both increasing sales taxes

Sales tax rates will rise next year in Lake County's two largest retail towns, but for different reasons.

Gurnee village board trustees voted this week to boost the home-rule sales tax by half a percentage point, or an additional 50 cents on every $100 retail purchase, to go toward infrastructure work. Gurnee's overall sales tax will rise to 8 percent.

In Vernon Hills, elected officials Tuesday approved an ordinance creating a quarter-percent local sales tax to offset an incentive agreement with Westfield Hawthorn Mall expected to cost the village about $1.2 million per year until 2025 and possibly 2030. Vernon Hills' overall sales tax will be 7.25 percent.

Both sales takes hikes will be effective Jan 1. Neither village has a property tax.

Gurnee Mayor Kristina Kovarik said while there were concerns about a higher rate negatively affecting retail business, the village will remain in the middle of the pack when compared to the sales taxes charged to consumers in suburbs considered competitors.

"We did a lot of research," Kovarik said Wednesday. "We actually pulled the sales tax (figures) of every community in Illinois."

Gurnee's local portion of the sales tax will be 1 percent and is projected to generate an extra $4.4 million annually.

Elected officials agreed 50 percent of the local sales-tax proceeds will go toward Gurnee's capital or utility improvement funds. Those funds are used to finance construction or repair of streets, sidewalks, sewers and other infrastructure.

Village Administrator Patrick Muetz said a dedicated revenue source is necessary to address deteriorating infrastructure.

"While no one likes a tax increase, no one wants to live on a street that is crumbling or be without water when an aging main breaks, either," Muetz said. "The sales tax allows the village to continue to operate without a municipal property tax, allows us to capitalize on visitors to our community and gets our capital program to a level that Gurnee residents expect and deserve."

Kovarik said there will be a redesigned marketing campaign to encourage residents to shop in Gurnee rather than buy items online, which brings no sales tax revenue to the village.

Vernon Hills officials said the quarter-percent home-rule sales tax increase will generate $2.4 million annually. Officials said the extra cash will allow the village to complete projects that might not otherwise be done or possibly lead to reductions in taxes or fees on residents.

Under state law, a home-rule sale tax may be enacted twice a year, on Jan. 1 and July 1.

• Daily Herald staff writer Mick Zawislak contributed to this report.