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St. Charles a step closer to raising sales tax to pay for street funding

The St. Charles City Council on Monday took a step toward increasing the city's home rule sales tax to generate more revenue for street funding.

At the government operations committee meeting, council members unanimously recommended approval of the increase. The recommendation will now go to the full city council for a vote on Feb. 21.

The city staff views a 0.50% increase in the local home-rule sales tax as the most effective option to address the funding gap for streets and related infrastructure. The city maintains 138 miles of streets and related infrastructure.

Finance Director Bill Hannah told the council a study recently completed by the city's public works department showed that the overall condition of the city's streets has significantly decreased in the last five years. He noted that an average mile of resurfacing costs $510,000, while an average mile of reconstruction can cost $1.6 million.

"As a street over time deteriorates, it becomes more expensive to maintain and bring it back up to satisfactory condition," he said.

The city currently has roughly $2.9 million available on an annual basis to fund street improvements, which consists primarily of the city's motor fuel tax revenues from the state and some funds from the video gambling tax revenue.

"That kind of puts the city on a 50-year cycle for road improvements, and as the study has shown, that's not sufficient to keep the city streets maintained at a satisfactory level over time," Hannah said.

He told council members that an increase in the local home-rule sales tax from 1% to 1.50% would generate about $4.4 million a year.

"In our estimate, it's possible that this local homes sales tax is paid 40% to 60% by nonresidents," he said. "So that was an attractive attribute of this option as we thought about this going forward."

The city's home-rule sales tax was established in 1994 at 0.25%, and increased in 1997 to 0.50%. It was increased again in 2004 to 1% in combination with the repeal of the food and beverage tax.

The Fourth Ward's Bryan Wirball was among the council members who spoke in favor of the increase.

"When 52% of our roads are in poor or very poor condition, I think it's long overdue," he said.

Resident Steve Gaugel, who once represented the Fourth Ward on the council, spoke against the increase.

"That half percent is going to put us a half percent over where our neighbors are," he said. "It is going to make our businesses less competitive. Every St. Charles resident is going to pay this."

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