Group wants 1-percent tax for downtown Elgin businesses
A proposed new tax for downtown Elgin businesses would expand the services provided by a downtown group to include enhanced marketing, negotiated group rates for snow removal, garbage pickup and more, and possibly revolving loan or grant programs for small-scale building improvement projects.
The Downtown Neighborhood Association of Elgin presented to the city council on Wednesday its plan to apply to the city for the creation of a new special service area of taxation, or SSA. The city council has the authority to establish the tax.
The tax would amount to 1 percent of a property's equalized assessed value as of 2002 or 2016, whichever is less, DNA Executive Director Deirdre White said. DNA officials previously said the tax would amount to 1.3 percent, but that was lowered, she said.
A 1-percent tax would yield about $155,000 annually to fund the DNA, or about $20,000 more than its current $135,000 yearly contract with the city of Elgin.
The boundaries of the special taxing area largely would mirror Elgin's central business district - extending just north of Kimball Street, east of Dundee Avenue, and just south of National Street - and would also include business on the west side of Route 31, White said.
The SSA would include 245 business parcels with individual PINs, while 640 parcels - such as residences, churches and nonprofits - would be excluded.
Property owners would be in charge of deciding which services they want from DNA, White said. "They will dictate the work of DNA and how they are represented as downtown Elgin's largest stakeholders."
With the new SSA, all DNA activities would focus on downtown business owners, DNA Board Treasurer Karin Jones said. For example, DNA would continue organizing the Fourth of July parade if it is moved from the northeast neighborhood to downtown, she said.
The SSA would last five years, and would have to be renewed by going through the same current process and vote by the city council, White said.
According to tax law, SSAs cannot be established if 51 percent of property owners and 51 percent of voters in that area object. Council members said they want to proactively ensure there is support for the new tax.
Councilman Toby Shaw said he doesn't want its legitimacy questioned.
The city has a duty to assess support for it, Councilman Terry Gavin said, "otherwise we would be governing against the will of the governed."
To that end, DNA will mail letters with tearsheets and pre-stamped return envelopes to business owners, White said. However, she cautioned that might not be an accurate measuring stick if return rates are low. "It's a great guide, but is a definite proposition of what the property owners want? I say 'no.'"
Jones said she believes the SSA has the support of the majority of property owners, but acknowledged she would have liked more participation in the 14 public meetings the DNA has held in the last 2½ years, most recently last week.
The new tax will give the DNA more autonomy without "having the city's thumb" on its contract, Mayor David Kaptain said.