Proposed Batavia alcohol tax questioned

The Batavia City Council is poised to increase what customers pay for water and sewer service and for leaf and brush pickup in 2016.

It is also ready to double the per-gallon tax on motor fuels.

But the panel is still discussing whether to charge a 2 percent city tax on the retail sales of alcoholic beverages after several business owners spoke to aldermen at a committee meeting Tuesday night.

The alcohol tax was proposed as a way to avoid raising property taxes to support the 2016 budget. Aldermen said it was better than an overall increase in sales tax, because alcohol consumption is voluntary unlike food.

But contrary to what aldermen believed, bar owners probably would not just pass the tax on to consumers, two bar owners told the aldermen.

John Hamel, owner of Pal Joey's restaurant, said competition means he wouldn't raise his prices. Hamel also plans to open a bar next to Pal Joey's.

"Business taxes like this don't get passed on to the customer," he said.

Several aldermen then noted that, for example, if a bar has a $4 draft night, the patron's bill would reflect a charge of about $3.69 for the beer and 31 cents for the tax.

"Why is liquor being singled out?" Hamel asked, suggesting taxes on other products be considered.

Alderman Susan Stark suggested that the city look in to an amusement tax on movie ticket sales, especially since neighbors Geneva, Elburn and North Aurora don't have movie theaters. But City Administrator Bill McGrath said an amusement tax would also have to be applied to video games, bowling and other amusements.

Alderman Kyle Hohmann suggested just charging the extra alcohol tax on packaged goods.

City workers will investigate and provide additional information at the Dec. 1 committee meeting.

The committee recommended:

• A three-year plan to increase the prices of water and sanitary-sewer service. The usage and monthly charges for water will increase 3 percent a year; the sewer charge, 6 percent a year.

• A $1-a-month increase in the leaf-and-brush-pickup fee, raising it to $4

The committee also tentatively agreed to raise the tax the city charges on motor-fuel purchases.

It also agreed to specifically list compressed natural gas as a motor fuel, because Advanced Disposal garbage-hauling company is converting its fleet to CNG. Advanced Disposal has a waste transfer station in Batavia.

The tax would double, from 1 cent a gallon to 2 cents per gallon or gasoline-gallon-equivalent measure. The increase would start Feb. 1.

"I think it is a good idea, I don't think it is enough. I think we should have gone up to 3 cents," Alderman Michael O'Brien said. City Administrator Bill McGrath said a check of what other home-rule towns in Illinois charge showed many charge 3 to 5 cents per gallon.

The council is expected to take binding votes on the fuel tax, the leaf-and-brush fee and the water and sewer charges at its Dec. 7 meeting.