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Urbana Council Continues Discussion On Sales Tax Proposal

Despite a lukewarm response, Urbana City Council members have opted for further discussion on a plan to raise the city sales tax by a quarter-percent.

In Monday night’s Committee of the Whole meeting, aldermen opted to send the plan to full council next Tuesday, but without a recommendation for it. 

A couple council members said they were not comfortable moving ahead without more discussion, and more options on the table. The council held its first discussion on the sales tax hike Monday night.

Mayor Laurel Prussing said her plan is necessary to make up for a $1 million shortfall brought on by Carle Hospital’s tax-exempt status, as well as the increased cost of employee health insurance.

Prussing said the tax hike needs to be part of any revenue plan, and she did not want to discuss other options Monday night.

“I don’t think there are any alternatives to the sales tax, cause the sales tax doesn’t bridge the whole gap," she said. "There’d only be an alternative if you had more than one way of bridging the gap. And we’re going to take a combination just to get up to a million dollar bridge.”

The lone 'no' vote Monday was from Republican Alderman Michael P. Madigan. He said it is time to consider staff reductions within an $18 million personnel services budget.

“I know that that's a very hard thing to say, and a hard thing for a lot of people to come to grips with," he said. "That’s where we have to go. And whether it’s by attrition, whether it’s by reviewing what the core services of the city ought to be, and actually starting to pare back on some of the things that are not core services. The time for that discussion is now.”

The Champaign City Council has already approved the tax hike, and if Urbana approves it, both cities would be at 9 percent in January. Prussing said she does not believe consumers would change their shopping patterns if the measure does not pass.

The city council faces a time crunch. Urbana needs to inform Illinois’ Department of Revenue by Oct. 1 if it plans to enact the sales tax increase by January.

The only member of the business community to speak out against the plan Monday was Brittany Bailey Frost of Blossom Basket florist, saying the tax hike would be detrimental to local business.

Categories: Economics, Government