Effingham Daily News, Effingham, IL

Local News

December 1, 2013

City council to hear sales tax proposal

EFFINGHAM — Unit 40 Superintendent Mark Doan will present to Effingham City Council members Tuesday an update on the countywide sales tax proposal to benefit the district.

   The district is proposing a 1 percent sales tax increase throughout the county, which voters must approve, to finance a consolidation of the district's buildings, some of which are aging. The plan is to use $2.6 million in annual funds from the increase for the upfront costs of the consolidation that is designed to save the district money in the long run. The tax would only be on luxury items, such as prepared food and other retail items. Groceries, prescription drugs and farm equipment would remain unaffected by the tax increase.

     The sales tax increase also would help the district abate property tax payments for bonds owed on construction of Effingham High School in 1998.

     Unit 40 school board must approve placing the proposed increase on the March Primary ballot. The board has until Dec. 30 to make that decision. While no approval is needed by the council for the issue to go before voters on the ballot, Doan has said he wants to offer as much transparency as possible.

     Some council members have voiced concern about the proposed sales tax increase. City Commissioner Brian Milleville has spoken out against it at previous meetings.

     Milleville said he plans on bringing up several issues he has with the proposal, the biggest being school districts outside the city receiving half of the funds generated by the sales tax increase, even though 88 percent of sales are made in the city of Effingham.

Calling it a “redistribution of wealth,” Milleville also has issue with who votes on the proposal. Although the majority of sales taxes are paid in the city and by Effingham businesses, he noted the tax increase can be passed by voters outside the city, because there are more voters in the county. Milleville believes an increase could eventually hurt the city's retail draw that comes from a lower-than-state-average sales tax rate of 6.5 percent.

     Milleville also is concerned that future school boards are not bound to continue property tax abatements. He believes costs associated with the state's pension crisis will be passed on to local districts, thereby raising property taxes.

     However, Doan has said 54 percent of the city's sales taxes are paid by out-of-town shoppers. He also has pointed out that revenue from the increase would make the district more efficient by lowering the number of buildings within the district by half.

While counties, such as Champaign and Macon, have passed and implemented the school facilities tax, voters have failed to approve the measure in neighboring Shelby and Fayette counties.

     The council meets at 6:30 p.m. Tuesday in city council chambers, located at 201 East Jefferson Avenue.

  

    

 

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