Saluki Way Tax

 Back around 2009, city council passed the Saluki Way tax, increasing local sales taxes by .25% to help fund the replacement of McAndrews Stadium, remodeling of what is now Bantera Arena and helping cover the cost of the Studnet Services Building (which is not currently named after anything). The tax is supposed to raise about $1 million a year to help with repaying the bods issued to pay for all the contstruction and is scheduled to expire in 2027 or 2029. 

I certainly hope the council does not pass a resolution keeping the tax in place. Our current sales tax rate is higher than about 90% of the other sales tax rates imposed by other communities throughout the state and I have heard from several local restaurant owners they have lost catering business to restaurants in Marion and Murphysboro due to their lower tax rates.

Property Taxes

 Given the hue and cry over Walker's Bluff Winery's recent announcement they were closing the facility due to high property taxes, here a basic overview of property taxes in Illinois and how they are calculated. With some exceptions, property taxes are assessed at 33% of the fair market value and, if oounties assess the value above or below that amount, an equalization factor kicks in to adjust the value back to 33% .  If you are not happy with property taxes, it is not all the fault of the country board.

Grocery Tax

 Carbondale was going to see the end of the regressive 1% tax on groceries as the state eliminated it at the end of 2025. However Carbondale, and a number of other local cities ( Anna, Cobden, DuQuoin and Herrin), opted to enact their own 1% grocery tax. Nothing really changes as grocers continue to send the tax revenue to the state, which then sends it back to the city, the same process as before. It just means no tax reduction on food.

Tax Passes

 According to this article from the Southern, the city council voted last night, 4-1, to instate a 1% grocery tax when the state mandated tax ends at the end of 2025. The tax will put an estimated $1.5 million annually into the city treasury but will not add any money, since the city received approximately that amount from the state grocery tax.

City Council Agenda

 Here is the city council agenda for tonight. One noticeable item  is the resolution enacting a 1% grocery sales tax to replace the one the state is eliminating. Last year, the state eliminated its 1% sales tax on groceries but left it up to municipalities to enact a local grocery sales tax if they should wish. It appears Carbondale does wish.

Since Carbondale has one of the highest sales tax rates in the state outside of Chicago, It certainly would be nice if the recently elected city council members would start pushing to lower sales taxes to something closer to the state average of 8.85%.

Cannabis Tax

 Carbondale received just under $35000 in revenue from cannabis in the fiscal year that ended last month. Carterville got a bit over $9000 and Murphysboro, $11,000. 

Grocery Sales Tax

 Under this year's state budget, the 1% sales tax on groceries ends in 2026. However as a sop to local municipalities, which got the money from the 1% tax, the budget also gives local governments the power to institute a local sales tax on groceries, without passing a referendum. Given that our city council passed an ordinance keeping in place a 1/4% sales tax put in place to fund school roof repairs,  that was due to expire several years ago, I would not be surprised to see a vote on establishing a local tax on groceries after the expiration of the grocery tax.

SIH

 Given the number of house demolishions along West Oak and South Almond, I would expect SIH to build upon those properties sometime in the next year or so. 

All of the houses, save one, along West Oak between Poplar and University have been demolished, including the reportedly haunted "Rain House" and the one time but extensively renovated home of Gen John H. Logan. In addition, all of the houses along West Oak between Poplar and Almond and the houses on N. Almond between Main and Oak are gone. I had not realized how much demonlition had taken place in the area until I happened to bike through there this week. Just a lot of empty lots, which I expect SIH will expand its campus onto within the next couple of years which, since SIH is a not for profit, means more property taken off the tax rolls.

Saluki Way Tax

 From what I am hearing, the city council already plans to keep the Saluki Way tax in place when it expires later this decade. Passing a resolution doing so will likely be all that will be necessary to do as that is what the council did when the sales tax increase to pay off bonds issued to pay for new roofing on the high school expired. Unlike the initial vote to increase the sales tax, which attracted large crowds for a council meeting, the resolution to keep the roof tax part of the sales tax passed very quietly with only a few people in attendance.

Carbondale's sales tax is currently 9.75%, higher than 93% of cities and counties in the state. At least we are not as high as Chicago, which is 10.25%

Town Square Sales Taxes

 Looked at the business located on the Carbondale square and realized that over half of them do not collect any sales taxes. South side of the square is empty save for the train depot, which houses the offices of Carbondale Main Street and the Carbondale Chamber of Commerce, both of which are not for profits that don't sell anything. 

The west side of the square consists of offices, Fringe, Practice Pad and the Rainbow Cafe. Practice Pad may sell some musical equiptment but its primary business is music lessons.. Services in Illinois do not collect sales taxes.

North and east sides have two restaurants, 2 groceries, ABC Liquors, Hair Brains and Arthur Agency. The first five do collect sales taxes but the last two do not. That is a lot of places in downtown not generating any sales tax revenue.

Marijuana Tax Revenue

 Caught on this past week's State Week that tax revenues generated in Illinois by marijuana amounted to 19 million in July. Tax revenues from alcohol amounted to 22 million. Due to higher taxes on cigarettes in Illinois, the state has seen leakage to surrounding states with lower cigarette taxes for years. However, since those selfsame states do not offer legal marijuana sales, I surmise Illinois is reaping the benefits of traffic from their citizens wanting to purchase legal cannabis . 

Taxes

Taxes will stay in place unless someone pushes to remove them. Those of you who have lived in Carbondale for 15 years or so will remember the mayoral term of Brad Cole whose particular hobby horse was Carbondale's property tax, which he felt was too high so he spent much of his first term successfully eliminating the city's share of the property tax, leaving the rest of the tax divided up among other taxing bodies such as the Park District, Library, School District, Mosquito Abatement, etc. The city's share was actually small enough that removing it did not make much difference in the size of the tax but made for a good campaign slogan.

Taxes

Nobody in the city wants to see services cut. Also, nobody in the city wants to pay taxes. Taxes are the cost of having the city provide services. If you want lower taxes, you either need to find areas in which the city is spending money inefficiently or propose services the city should cut in order to lower those taxes.
In general, someone is always going to want those services that you might see as wasteful. There is a reason the city started providing them in the first place.  Someone wanted them. Of course, it is always easy to add taxes and services but much harder to take them away. About a year or so ago, the tax paying off the bonds that paid for roofing on Carbondale schools from 20 years ago was due to expire as the bonds had finally been paid off, However, the city needed that money to meet its budget and it was far easier to amend the  ordinance creating the tax to extend it than it was to let it lapse and have to pass another one. If I recall correctly, only about 3 people showed up at the council meeting when the amendment was passed and no one objected strenuously against it.

Jane Adams' Letter

A letter from former councilperson Jane Adams, sent to members of the city council this week. A condensed version of this letter appears in this week's Carbondale Times. Letter posted with Adams' permission:

To my elected representatives,

I wasn't able to watch the zoom City Council meeting last night, but have read the Southern's and Scott Thorne's accounts. I'm frankly perplexed:

You have stopped some, perhaps many, City services. The ones I most notice as a resident is the administrative policy of not enforcing our weed and grass ordinance, and as a landlord, the temporary suspension of the rental inspection program. But with the City Hall/Civic Center closure, receptionists and others whose jobs required a lot of face-to-face contact with the public, as well as managing activities in the Civic Center, now have no obvious work to do. Have these workers been reassigned to other jobs? Or are they simply home drawing a paycheck without working?

If the former, the residents of this town have a right to know how staff who are underemployed are being reassigned. If the latter, they should be furloughed immediately, while the $600 weekly federal stimulus monies can be added to their regular unemployment benefits. 

You know -- and can calculate -- the amount of revenue the City is losing by not getting food and beverage and lodging taxes. And you can assume that, even if the stay-at-home orders are lifted the end of May (or perhaps earlier), those revenues will remain depressed at least through the end of this calendar year. And if predictions are accurate that students will be reluctant to return in large numbers until a COVID-19 vaccine is available, the City's economic depression may well continue for at least another year.

I don't understand your reasoning at all. It makes no fiscal sense to me, and seems to be a wasteful and irresponsible use of taxpayer monies. This crisis is putting a great deal of pressure on our community as the many small-scale, often sole-proprietor, businesses are closed, the "gig economy" collapses, and retirement portfolios shrink. This is a time for the City to take seriously the need to re-energize investments in, for example, promoting restoration of the large amount of blighted housing and business stock, helping our local hospitality and retail businesses restart, and making the community attractive to visitors and residents. That was at least part of what the new taxes were earmarked for. To take those revenues, without first furloughing temporarily redundant workers, is unconscionable.

Our restauranteurs have taken an enormous hit, and they're stepping up to help our entire community through the Southern Illinois Kitchen Collaborative and other initiatives. People have taken it on themselves to make masks for front-line workers. The University is providing food and learning materials for their students. All over the region people are stepping up to help those most deeply affected by this crisis. 

Where is the City? Raiding the local improvement fund to keep redundant workers on staff. If they, like so many small businesses, contract workers, and retirees in our community, faced penury if they were laid off, I'd say keeping them employed would be the right thing to do. But this is one place where our social safety net has actually been strengthened -- at least for covered employees -- by federal stimulus money. Take advantage of it!

Jane Adams

City Council Meeting

Caught the city council meeting on Zoom last night. The warrant items all got approved as did next year's city budget. The thing I found the most interesting were the votes to move  the  revenues generated from the food and beverage tax and the package liquor tax to the General Fund and a portion of the Home Rule Municipal Retailers' Occupation Tax and Municipal Motor Fuel Taxes to the General Fund. When I asked how much a portion was, the response was 50%.

City Council Meeting

Caught the City council meeting  streamed on Zoom last night. It went far faster than a normal council meeting would. I think the new technology inhibited the willingness of council members to comment on various topics since several of them accidentally muted themselves during the meeting., plus members of the community could only communicate to the council through email or instant messages.

The upcoming budget was discussed but the main topic of the meeting was the request by a number of restaurants to waive collection of March's food and beverage tax. After some discussion, the council decided to take no action on the request, effectively requiring collection of the taxes for March.  Council had two primary reasons for this:  1. The largest portion of the tax is collected by chain restaurants such as Chili's and MacAllister's Deli, with the smaller local restaurants generally remitting about $2000 and 2. Federal and state aid is starting to funnel into the regions (Traxx has already received a grant), so the council wanted to wait and see about what other funding would come in before waiving collection of the tax, since doing so would noticeably affect the city's treasury.

City Council Agenda

Here is the agenda for tonight's city council meeting. Looks as if the major thing is a discussion of waiving the collection of the food/Beverage  tax. Not sure if this would be for the past month or until the shelter order gets rescinded.  If it gets waived until the shelter order gets lifted, then restaurants offering delivery and pickup should make sure they stop collecting it as well. The tax, after all, is supposed to go to the city, not to those collecting it.

If you want to watch the council meeting, you can register to do so here. Questions for the council should be sent to council_questions@explorecarbondale.com

Tax Dates Extended

The city extended the due date for payment of certain taxes by about a month. Most businesses, mine included, combine tax collected with regular revenues and then remit the collected sales taxes to the appropriate entity on the due date. Instead of treating the money as a pass through and put into a separate account, which requires additional bookkeeping steps, business lump them all into one account and then remit collected taxes out of that account.

Unfortunately, businesses then forget that is not their money but was collected as a use tax, spend it and then have to worry about coming up with the money by the due date. Unusually, the business just pulls the owed taxes out of general revenue but now there is a situation where a lot of businesses, especially restaurants, collected taxes the first half of the month, used that money, and then had much lower revenues coming in for the past two weeks, while expenses such as rent and payroll still need paying. hence the push back of the date with the hope that businesses will, once they reopen, generate enough revenue to pay the tax collected.

Delinquent Real Estate Taxes

In case you missed it, a list of property owners with delinquent real estate taxes appeared in yesterday's issue of the Southern . Maybe not so surprising but several Carbondale rental property owners appeared numerous times on the list, a couple owing well in excess of $50,000

Gas Taxes

For all the complaining about higher taxes in Illinois, gas prices are not that much higher than those in Missouri. Here, when I checked over the weekend, gas in Carbondale ran about $2.56 per gallon. Today in Cape it was $2.29 a gallon. Cheaper yes, about 10% so, but probably not enough to make someone make a special trip to Missouri to gas up.