Fox Lake sales tax increase referendum on the ballot
Fox Lake officials will ask voters this spring for permission to increase the local sales tax to help fund capital improvements and more police officers.
Mayor Donny Schmit said officials also are reviewing a second referendum that could potentially change the way taxes are collected for the Fox Lake Fire Department and fire protection district.
Schmit said village officials approved placing a 1 percentage point sales tax increase referendum on the March 15 ballot. The village now has a 1 percent sales tax in place on some goods and services.
"We wanted to leave it up to the residents to decide if we should raise the sales tax," he said. "By doing a sales tax increase, the tax would not be completely born by our residents."
If the tax increase is approved, Schmit said, it would generate roughly $1 million that would go to offset a $2 million budget shortfall needed to pay for hiring full-time police officers and part-time police clerical positions, a need recently discovered by interim police chief Michael Keller. The revenue also would help fund road resurfacing, the village's facade program, and acquiring land on an as-needed basis for parks and recreation, Schmit said.
The sales tax would not affect certain foods, drugs or titled property, such as cars or boats. It also would not affect the bars and restaurants that were hit with a 1.5 percent sales tax earlier this year to offset a shortfall in state revenue.
The second referendum would change the way taxes are collected and distributed for fire services.
Currently, the village levys homeowners and collects tax revenue for the fire department and distributed to the fire district, Schmit said. If the second request is placed on the ballot and approved, the village would join the fire protection district and that entity would tax residents.
"I want the village out of the fire protection business," Schmit said. "If it's all one district, then politics and contract negotiations with the fire district is completely out of it. We will not have to negotiate fire services any longer, and they would have control of the district all to themselves."
The change could result in residents paying slightly higher taxes to the fire district, Schmit said. Because the current tax rate for the district is slightly higher than the rate residents pay to the village for fire services, property taxes could increase about $60 per year, depending on the equalized assessed value of the home, he said.
The village board will review the second question in coming weeks, Schmit said.