Gurnee considering raising hotel, amusement taxes
The Gurnee village board unveiled and discussed a plan to raise the village's hotel and amusement taxes Monday night, a plan the village staff estimates would generate around $1 million in revenue.
The plan would increase the amusement tax to 4 percent from 3 percent, and the hotel tax to 6 percent from 5 percent.
Village Administrator Patrick Muetz said the hotel tax was first set at 5 percent in 1986 and hasn't been changed since. The amusement tax was established in 1976. Last year Six Flags Great America contributed $2 million of the $2.3 million in revenue generated by the amusement tax.
Muetz said the additional revenue they generate using the tax increase will help offset the recent decline in general sales tax revenues.
Earlier this month the village reported that from May through October 2017 it collected $145,442 less in sales taxes over the same six months in 2016, a 1.7 percent decline.
Sales taxes are of particular importance to Gurnee because it does not levy property taxes for village services. Around 45 percent of the village's general fund revenue comes from sales taxes.
No board members said they were against increasing either tax, but there was some disagreement on what to use the money for.
The plan presented by Muetz calls for the village to increase contributions to Visit Lake County. But Trustee Greg Garner said Gurnee already pays more than any other village.
"They are a great value to us," Garner said. "But somebody else needs to shoulder some of this burden."
Muetz said the village would reach out to Visit Lake County and ask it to meet with the board and discuss the issue.
The plan also calls for around $300,000 of the new revenue to be set aside for economic development. Mayor Kristina Kovarik said the first question developers ask is if Gurnee can offer them incentives to come to the village.
Trustee Jeanne Balmes said it kind of drives her crazy that developers always want incentives to come to Gurnee. "Everybody wants their hand out," Balmes said.
Balmes requested that the $300,000 not be earmarked for incentives by ordinance in case the money was needed elsewhere.
A few local hotel managers attended the meeting. Kal Patel, of Country Inn Suites, said he understood why the village was considering raising taxes on them since it hasn't been raised in so long. Patel asked the board to use the new economic development money to encourage entertainment destinations that operate during the winter months when the hotel business decreases because Six Flags is closed.
Kovarik said that is what the village has been trying to do.
"We think very similarly," Kovarik said to Patel. "We are very focused on entertainment venues."
The board took no action on the tax increases Monday night. Muetz said they could vote on the plan at the March 5 village board meeting.