Residents and non-residents traveling in and around Downers Grove will find a 1-percent beverage tax applied to the cost of alcohol, packaged liquor and non-alcoholic beverages for immediate consumption beginning Jan. 1.
In a pair of votes, Downers Grove officials in attendance at July 18 meeting agreed 5-1 to create a 1-percent beverage tax to capture lost revenues and voted 1-5 to help reject an amendment establishing a 1.5-percent tax.
The measure, as approved, will be due for review toward the conclusion of the 2018 calendar year, at which point the council will again need to weigh the cost of creating the tax.
“This is all about replacing lost revenue,” Mayor Martin Tully said. “This is clearly to fill a whole that’s been created by declining sales tax because of … shifts in the economy and market trends, which take more and more dollars away from our community through Internet sales and changing trends in basically how people live and how they will continue to live in the future.”
Tully stressed that it’s important for the Village to find a way to recapture lost dollars.
“There were other options that were considered that would’ve done that such as raising the property tax levy and other things that were considered, but they were viewed by this council to be far less attractive,” he said.
Commissioner Bob Barnett urged the board to consider amending the measure to incorporate a 1.5-percent beverage tax, as well as a sunset clause to get the council to review its decision later as opposed to discontinuing it.
“As noted by the [Village] Manager, we have other impacts of the state budget situation that are likely going to cause us pain in the near future short-term,” he said. “That’s the reason for the additional 0.5-percent.”
Hose wanted to be clear that he likes the idea of introducing the sunset clause, but he is opposed to the amendment because it seeks to raise the beverage tax from 1-percent to 1.5 percent.
Commissioner Marge Earl agreed, and went on to say that she would not support the amendment because she thinks it’s “over-reaching.”
“One percent is about all I can stomach, but I totally understand the need,” she said. “The best I can say is, it was the least evil of any of the options, and 1-percent is sufficient for now.”
Tully recognizes the reasoning behind the amendment and said he suspects the original proposal is the more responsible course of action to take at this time.
“Sunset clauses, I’ve been a proponent of that in the past,” he said. “I appreciate that being put forward, but the reason why I’m not crazy about it here is because in the past sunset clause has been put on a revenue stream that was more or less designed for a specific and acute need—whether it was the retirement of the Fairview Avenue bonds or it was making the transportation fund in the black again and retiring that system. There was a dedicated goal that had a finite end to it.”
Tully added, “It’s really a shift from where [revenue is] disappearing to where it still is.”
Downers Grove officials will have a chance to review the matter again when the council begins budget discussions later this year, at which point they may consider raising the beverage tax from 1-percent to 1.5-percent.