Sales taxes revenues down in Gurnee halfway through fiscal year

Sales tax revenue in Gurnee failed to meet the village's modest projections five out of the first six months of the fiscal year, according to a report presented to the village board.

From May through October 2017, the village collected $145,442 less in sales taxes, a 1.7 percent decline over the same six months in 2016. Sales taxes are of particular importance to Gurnee because it does not levy property taxes for village services. Roughly 45 percent of the village's general fund revenue comes from sales tax, Finance Director Brian Gosnell said.

Mayor Kristina Kovarik said the numbers follow a trend of more people shopping online.

"Every time someone shops online, that takes revenue directly away," Kovarik said. "I urge residents not to shop online unless you absolutely have to."

Kovarik said the sales tax numbers presented Monday were off by a hair and she's particularly eager to see them for November and December. Those numbers will be released in February and March, respectively.

"The holiday shopping season is very important for us," she said.

Kovarik said retailers have been saying they can't put all their eggs in just sales and needs to augment shopping with entertainment opportunities for customers. She said retailers have expressed interest in building new entertainment and restaurant businesses in the Gurnee Mills corridor, which might attract more shoppers.

"While they're here, they'll also shop," Kovarik said. "That halo effect is very valuable to us."

She said the village is continuing to explore ways to take advantage of entertainment venues such as Six Flags and the soon-to-open Great Wolf Lodge.

Gosnell said the village's sales tax revenues have flattened in recent years. Last year, the village brought in just less than $17.5 million in sales tax revenue and this year it projects revenue to be virtually the same.

Gosnell said the main source of decline is in general merchandise and apparel sales. He said there was a spike in auto sales two years ago, but that seems to be flattening out.

Other areas of revenue, such as hotel, amusement and income taxes, are all increasing along with inflation.

"Those are performing as we would expect, but when 45 percent of the budget comes from sales tax, that's the one you want to be performing," Gosnell said.