Geneva drops places-for-eating tax after all

Soon-departing Alderman Tom Simonian notched a victory in convincing the Geneva City Council to rescind the 2 percent places-for-eating tax due to take effect May 1.

The council voted 6-4 Monday to abandon the tax, which administrators estimated would generate $1.5 million annually for the city.

It was a last stand for Simonian, whose term expires April 30. He did not seek re-election and instead ran for mayor. He lost to incumbent Kevin Burns, who favored the dining tax.

Simonian repeated Monday that he thought the tax was unfair to restaurant owners; that the city didn't need the extra money, given it has a balanced budget and more than 25 percent in reserves; and that if the city does need the money, it should look at other ways, such as asking Northwestern Delnor Hospital for a payment in lieu of property taxes, or increasing the citywide sales tax.

City officials say the city needs more money so it can increase spending on capital projects, such as road repairs, and on equipment.

Aldermen also again discussed whether to delay the places-for-eating tax and instead try to persuade voters to agree to raise the sales tax, and whether restaurateurs would make good on their promise to work to persuade voters to say "yes."

If a sales-tax increase were approved in March 2018, it could start in July. The city could spend the money on anything through Dec. 31, 2020. After that, it could spend the money only on property tax relief or on streets, sidewalks, waste disposal systems, water and sewer line extensions, water distribution and treatment facilities, stormwater drainage and retention and sewage-treatment facilities.

Last week, aldermen discussed delaying implementing the tax until Oct. 1.

The council adopted the tax in October 2016. It initially was supposed to start Jan. 1.

Aldermen Craig Maladra and Mike Bruno said they had called other communities to see what effect a places-for-eating tax had on business, and were told there was no effect.

"To rescind it now without saying 'Here's how we are going to meet the challenges we face' is irresponsible," Maladra said.

Aldermen Dean Kilburg, Maladra, Bruno and Jim Radecki voted against rescinding it.