Why Glen Ellyn wants to impose a new food and beverage tax
Glen Ellyn trustees are set to impose a new food and beverage tax to boost revenue for major infrastructure projects downtown.
The board will vote to approve the 1.5 percent dining tax later this month, but an informal straw poll of trustees Monday night shows it would easily pass.
The tax could raise between $825,000 to $1.2 million annually to pay principal and interest payments on bonds the village would issue to fund capital projects in the central business district and along the Roosevelt Road corridor. If adopted, the tax would take effect in March and sunset once the village pays off the debt.
The Glen Ellyn Chamber of Commerce has endorsed the tax that would help support funding for big-ticket projects either nearing construction or in the design phase. Those projects -- prime among them new streetscape and a parking garage -- are part of a broader vision to make the downtown more vibrant and attractive to developers and patrons, proponents of the tax say.
"Each of the capital improvements on the short list, as well as potential, they all contribute in a greater way to the community," Village President Diane McGinley said. "So the parking garage, for example, we've lost several opportunities for developments because of lack of parking. So whether or not we perceive that there is one, people who are coming into invest in our town have identified that it is a problem.
"And therefore we need to address it if we want our community to continue to prosper and stay full of vitality in our downtown and in our Roosevelt district."
Trustees John Kenwood and Gary Fasules indicated Monday they would oppose the tax when the full board votes on the ordinance Sept. 24.
"I think we have a lot of needs that we haven't even addressed and we can address that are infrastructure issues that we may have that the village -- no one -- sees," Fasules said. "They're all underground: sewer, floodwater, things like that. Those are the type of projects that I would like to see invested in."
The food and beverage tax revenue is only one funding source for proposed projects that could need between $15.8 million to $26.2 million in financing, officials say. Those include:
• Building a downtown parking garage on the Civic Center lot at an estimated cost of $10 to $15 million.
• Completing roadwork and improvements to downtown streetscape last updated in the 1980s. The village currently has about $8.5 million budgeted in its capital plan and needs to come up with an additional $2 million to $4 million to fund that project, Finance Director Christina Coyle said.
• Replacing the 1960s-era Metra station downtown and building a pedestrian tunnel to bypass the tracks. "Substantial" state and federal grant funding would pay for the project, with the village potentially contributing a local share of roughly $2 million to $5 million, Coyle said. The project also could be years away from breaking ground.
The village now sets aside three revenue sources -- property, utility and real estate transfer taxes -- for the capital projects fund. Revenue from utility taxes have sharply declined, Coyle said. In 2017, the village collected about $550,000 less in utility tax revenue than the decade prior.
"That's really due to a shift in energy conservation because our utility taxes for gas and electric are billed on a usage basis," Coyle said. "So as everyone has gotten more energy efficient ... that's great for our residents and our businesses because their costs are decreasing, but it does decrease the taxes that we receive. And then our telecommunications tax has really been hurt by the implementation of the cellphone. We only get taxed on the phone portion of your cellphone bill, not the data, not the texting."
Elmhurst, Downers Grove and Lombard are among the neighboring towns that charge a food and beverage tax. In Glen Ellyn, officials say patrons can expect the tax to cost an additional 75 cents on a $50 restaurant bill or 5 cents for a $3 coffee.