Higher sales tax or dining tax: Geneva will get one
Geneva residents will decide in March whether to increase the city's sales tax, knowing that if they don't, the city will start taxing restaurant meals.
The city council Monday unanimously agreed to ask voters to raise the sales tax by one-half of a percentage point.
It voted 6-4 to institute a 2 percent places-for-eating tax, to be implemented May 1 only if voters reject a sales tax increase. One alderman was absent, but Mayor Kevin Burns voted, and voted "aye."
They did so despite pleas from five business owners that a places-for-eating tax unfairly singles out the restaurant industry, and their belief people would dine less in Geneva because of the tax.
The Chamber of Commerce supports raising the sales tax, which would only apply to general merchandise. It opposes the places-for-eating tax.
"Restaurants are very important to our economy," executive director Jean Gaines said, especially because they attract visitors from other towns. "If the (sales) tax does not pass, we must stand with our restaurant members."
Nancy Luyten and Jason Levin said they are willing to promote the sales tax increase, agreeing with city officials that the city needs more money. But linking the dining tax to the sales tax increase's fate makes their support look self-serving, Levin said.
"For us to help you do that (get the sales tax increase), it needs to be about that. It needs to be about what the city needs, not about what we (restaurant owners) don't want," said Levin, co-owner of Nobel House.
Luyten said a dining tax would be unfair, because the proceeds would benefit the whole city.
"Everyone needs it (the revenue) in Geneva. Everyone benefits from it, not just the restaurants. And to take this small, small business of just restaurants and put this on our backs is not fair."
There are about 145 restaurants and bars in Geneva.
Alderman Tara Burghart voted against the dining tax, seeing it as coercing restaurant owners to support the sales tax.
Alderman Becky Hruby saw it another way. Voters need to know the choice is either more sales tax or the dining tax.
"I don't think it is fair for the public to go to referendum thinking 'I'm going to vote 'no' on this tax and there will be nothing more,' " she said.
If the sales tax increase passes, money collected through Dec. 31, 2020 could be used for operating expenses. After that, it could only be used on infrastructure.