GLEN ELLYN – To make up for cuts in state revenues, Glen Ellyn officials are eyeing a 0.25-percent increase to the village's home-rule sales tax.
Currently, the village has a 1-percent home-rule sales tax. The proposed increase would take effect July 1.
Village trustees will be considering the increase in a two-reading process at future board meetings. The first reading will be at 7 p.m. Feb. 26, and trustees could possibly approve the increase at their meeting at 7 p.m. March 12. Both meetings will be at the Glen Ellyn Civic Center, 535 Duane St.
The home-rule sales tax, which is collected on nonresidents as well as residents, does not apply to groceries, auto sales or prescription and non-prescription drugs. Village officials project the increase would provide an additional $247,500 in operating revenue for fiscal year 2018, as only a half year will be collected.
As Glen Ellyn Finance Director Christina Coyle explained to trustees in a memo, because of cuts in revenue from the state, the village's general fund budget for 2018 had a preliminary deficit of $848,214.
"The state of Illinois cut 10 percent of our income tax revenue, which funds 16 percent of the general fund budget," Coyle said. "This cut equates to $290,000. Also, the income tax revenue itself performed poorly at the end of 2016 and through 2017 due to tax law changes implemented by the state. At the end of 2017 this revenue source generated only $2.5 million, losing all positive gains in this revenue over the last five years."
In addition, she said the state also began charging a 2-percent fee to collect the home-rule sales tax, which equated to about $40,000.
"Lastly, the police pension annual contribution increased $346,000," Coyle said.
Coyle said there could be additional financial hardships on the village as well.
"In January 2018, the Illinois Municipal League published revised estimates for two main revenues in our general fund, the income tax and use tax," she said. "Based upon these estimates, we could anticipate an additional negative hit to the general fund budget of $25,000."
In November 2017, the consensus of village trustees was to use reserves of $600,714 and implement a quarter-percent home-rule sales tax to balance the budget.