Kildeer looking to increase sales tax by half cent per dollar

Updated 2/3/2012 1:05 PM

On March 20, Kildeer residents will have a chance to vote on whether they want their town's sales tax to increase 0.5 percent, bringing it up to 7.5 percent.

The referendum question that will be on the ballot states that the tax will be used "on expenditures for municipal operations, expenditures on public infrastructure or for property tax relief."

Village administrator Michael Talbett said that in simpler terms, the main reason for the referendum is concern about the need to fund future road maintenance.

"The village looks at this request as a quality-of-life issue," Talbett said. "The residents here expect the roads to be in good shape and it reflects the image that the community has for itself -- we want it to be nice, we want it to be safe. I believe (residents) will understand the need for this."

Village officials say road resurfacing and reconstruction are behind schedule and without additional resources, roadway improvements will continue to fall behind.

Overall there are no dangerous roads in Kildeer that are in dire need of repair, Talbett said, but because roads deteriorate with time, money from the proposed sales tax increase will keep maintenance up to date.

"We're trying to do this now to prevent more expensive repairs later," he said, adding that the extra funding will allow the village to "take care of problems before they occur."

In November, the village board unanimously agreed to put the referendum on the ballot.

"They're proactive on this issue," Talbett said. "They didn't wait until the roads began to deteriorate to the point that you couldn't ignore it."

If the referendum passes, the resulting sales tax increase would generate an estimated $500,000 for the village annually. Examples of taxable items include gasoline, clothing, alcohol, tobacco, cleaning supplies, toiletries, cosmetics, car parts, dining in and carry out, catering and pet foods and supplies.

Among items that will be excluded from the tax are groceries, prescriptions, over the counter drugs, vehicles and services ranging from dry cleaning to accountants.

Only 1 percent of the current 7 percent sales tax is received by the village. Of the remaining tax, the state receives 5 percent, the Regional Transportation Authority receives 0.75 percent and Lake County receives 0.25 percent, according to a document on the village's website.

Talbett said the village has never amended its portion of the sales tax.

While the request is for a 50 percent increase in the village's portion of the tax, Talbett noted that Kildeer still will be at the low end in its sales tax rate compared to surrounding communities even if the referendum passes. Long Grove and Mundelein have an 8 percent sales tax.

"I think this ... will allow us to put a program in place that would be sustainable," he said.

Talbett said more than 50 percent of shoppers in the village are visitors, so he expects a substantial amount of the additional tax revenues to come from nonresidents.

He added that he does not expect an increase would deter shoppers, as a person purchasing $50 worth of goods will only pay an additional 25 cents.

Talbett said he hasn't heard any opposition to the increase, but he acknowledged that many residents are not aware of it yet.

"We're trying to make it a point to spread the word," he said. "We always like to see our residents involved in what we're doing."

If passed, the tax increase would take effect on July 1.

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