Among the latest ideas is a .25 percentage-point increase in the home-rule sales tax, which would raise the sales tax to 8.75 percent.
The increase would make the city’s sales tax one of the highest in the state, equal to that of Chicago and about a dozen other home-rule municipalities. Only one other city, Rosemont, has a higher rate, at 9 percent.
Ald. Joseph Kent (5th) said higher sales taxes would be more fair than previous proposals, such as the food and beverage tax increase rejected two weeks ago by the council.
“If it has to be done, it’s a little more pleasing to the palate to do it across the board,” Kent said. “It might be the very best that we can do at this time.”
The sales tax increase would raise $900,000 a year in revenue. When added to other proposals the council is still considering – including raising the packaged liquor tax by 2 percentage points, raising liquor license fees by 30 percent and using a one-time $200,000 gas tax rebate – the council would have to increase property taxes by just 2.57 percent to eliminate the deficit. Without these alternative revenue sources, the property tax increase would be about 9.4 percent.
“We have tried to keep as much of the burden off residents as possible,” Kent said of the various measures. “Even if we can’t level out (the property tax increase) at zero, we want to at least let (residents) know we try to look out for their interests.”
But Ald. Stephen Engelman (7th) said he isn’t sure whether he will vote for the sales tax increase.
“It’s a regressive tax, and a disincentive to shopping in Evanston,” Engelman said. “I would have preferred a different way of approaching this.”
Because there are few alternatives remaining, he said, he may have to support the sales tax increase.
“I wouldn’t be supporting it at all if it wasn’t going to offset the property tax increase,” Engelman said.
Linda DeWoskin, owner of Something Wicked bookstore, 816 Church St., said she thinks the council’s sales tax increase proposal “stinks.”
“They’re always trying to take money out of the business side,” DeWoskin said. “I am an Evanston resident and voter, and I’m not happy about it.”
Instead, DeWoskin said, the city should try to tax Internet sales, which currently are exempt from any sales taxes.
“If customers buy books online, they don’t pay taxes,” she said. “But if the same book is bought in our store, the customer has to pay sales tax.”
The council is nearing the deadline for approval of the budget. By law, it must adopt a budget before March 1, when the budget takes effect.
The council will also vote Monday on an ordinance that would liberalize the city’s liquor laws.
If passed, the ordinance would lengthen liquor sales hours to 8 a.m. to midnight, seven days a week. It would allow retailers to sell liquor anywhere inside the store, sell cold beer and wine, and use any cash register for alcohol sales.
The council will meet at 7 p.m. today at the Evanston Civic Center, 2100 Ridge Ave.
