Video: Sales tax hike a strong possibility in Wilmette’s future

In January, Wilmette Village President Bob Bielinski said village residents would have to talk this year about how to pay for Wilmette’s increasingly unmet capital needs.

This week he told business owners that may mean hiking its .25 percent home rule sales tax to 1 percent.

Bielinski also said he’ll take the message he delivered July 15 to Wilmette Chamber of Commerce members – one he said explains why new revenue is desperately needed – to the public between now and September, when village staff and elected officials put the 2015 budget together.

The board hasn’t made any decision yet, he said, “but we’re sort of learning at matching our neighbors’ [sales tax rates],” he said.

The next day he expanded on that: “I’d say the board is very seriously considering an increase in the sales tax, directly tying most of it to our capital needs.”

Hiking home rule sales tax to 1 percent would allow Wilmette to mirror the rates in neighboring Evanston and Skokie, and in communities such as Park Ridge. It would be slightly higher than the .75 percent rate in Glenview and Northbrook, but Wilmette would no longer have among the lowest home rule sales tax rates on the North Shore.

“We didn’t want to put our own businesses at a disadvantage,” he said. “The good thing about a sales tax, though, is that it doesn’t fall solely on Wilmette residents.”

And every quarter percent hike in sales tax could bring the village about half a million new dollars, he told listeners. That would be significant for a village whose annual operating budget stands at $33.3 million.

Bielinski said his message “doesn’t come in three easy bullet points,” but he still kept it simple in the July 15 presentation.

The village faces almost $16.9 million in upcoming or already deferred capital needs between now and 2017, he said. That includes $6 million in regular street resurfacing, another $2.8 million to maintain brick streets, $3.2 million in alley maintenance, and more than $1 million to replace aging or worn out police cars, ambulances, trucks and snow plows.

Those are all in addition to the roughly $26 million in sewer improvements already planned between now and 2015, to be paid for by bond issuances.

At the same time, Wilmette officials estimate the village has lost a cumulative $15 million in non-property tax revenue since 2007 and the following recession, he said. Sales tax – at $3.9 million, the village’s second largest source of tax revenue – has suffered, as has revenue from utility, income and real estate transfer taxes, among others.

Although the economic picture is improving, with new revenue starting to come in from the now-open Marriott Residence Inn, Wilmette officials don’t see revenues increasing more than an average of 3 percent annually in the near future; since they also see operating costs increasing about that amount, existing revenues won’t be able to tackle the accumulated capital needs.

“What I tried to do with this presentation was be very clear and give [listeners] a dose of reality,” Bielinski said Thursday. “This is where we are. No one is going to fix our streets for us.”

The village has already cut costs, Bielinski said, eliminating 13 staff positions since 2008, and cutting back on services when possible. After cutting costs, raising revenue is the only other way to make sure the village can pay for capital costs.

Bielinski said other potential revenue sources could come from cigarette or package liquor taxes, or from a gasoline tax.

At least one other revenue source is off the table, however; Bielinski said “we definitely ruled out” a restaurant tax. The village has worked hard to bring new restaurants to town; five have opened since the beginning of 2013.

After he spoke to Chamber members, at least one member appeared open to considering the idea of a sales tax increase.

“We all drive on the roads. We can all understand the need to keep them in good shape,” Bill Lee said.

TAXING QUESTION

WHERE: Wilmette

CAPITAL NEEDS: $16.9 million

GOAL: Find the funds

WHERE: Potential sales tax hike

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