Quincy News

After years of rejection, food and beverage tax gets another look

By Herald-Whig
Posted: Apr. 22, 2019 10:10 am Updated: Apr. 22, 2019 4:20 pm

QUINCY -- Over the years, Quincy's leaders have consistently decided not to implement a food and beverage tax. Mayor Kyle Moore said those decisions -- nearly all a decade old -- were the right decisions for Quincy at the time.

"I think leaders made a wise choice then and chose instead to make Quincy the retail destination of our region," Moore said. "That decision literally paid dividends for us, and we saw increases in sales tax revenue year after year."

In 1995, Quincy's aldermen were presented with a proposed 1% food-and-beverage tax, which at the time was expected to generate $300,000 annually for the city. Under this proposal, which was ultimately rejected, this new revenue was planned to finance an expansion of the Oakley-Lindsay Center and construct a five-story hotel connected to the exhibition hall.

In 1999, a similar proposal was made to create a 2% food-and-beverage tax. Funds from this proposal would have gone to Civic Center Authority to pay some outstanding debts. Ultimately, the Civic Center Authority decided not to refer the proposed tax to the City Council citing a fear that such a tax would drive visitors and restaurant patrons from Quincy.

In 2002, former Quincy City Council member Chuck Fitch proposed a half-cent tax on food and beverages. Fitch's proposal, forecasted to generate $3.3 million annually for the city's coffers, was ultimately rejected by his fellow aldermen.

In 2018, efforts to create a food-and-beverage tax stalled when members of the City Council tabled any discussions on a proposed 2% tax.

Now, in 2019, some city officials are questioning if those decisions not to implement were the right decision for Quincy.

"Hindsight being what it is, was it best to do that?" asked Aldermen Jeff Bergman, R-2. "No one can really say."

According to city's "Roadmap to Sustainability" report from October 2018, a food-and-beverage tax would generate an estimated $1.5 million.

The tax is paid by consumers and would be assessed to any business which serves food or alcoholic beverages. The report says it would not be applicable to churches, public or private schools, boarding houses, day care centers, nursing homes, retirement centers, coin operated vending machines, grocery stores, confectionery stores or other locations belonging to non-for-profit associations or corporations.

That is money that Bergman said the city could use to meet its public safety pension obligations. City officials said last week that they would no longer be able to use General Revenue dollars to meet those obligations.

"It is an option that we need to look at," Bergman said. "Of the options that have been presented right now, it might be the most fair option, because studies have shown that 30 to 40 percent of the people who eat in our restaurants everyday are actually from outside of the city limits. So, ultimately, the tax burden to the Quincy taxpayer might be actually lessened overall by doing a food-and-beverage tax compared to simply raising property taxes."

In last week's meeting of the Quincy City Council, city leaders said early projections and estimates show that the city would need to raise property taxes for next year by 22 percent in order to meet its pension obligation. For someone owning a $100,000 home, this tax increase would equate to roughly $64 in new taxes per year.

A utility tax is also an option worth considering, according to Quincy aldermen.

City officials estimate a utility tax up to .0515-cents per therm and .0632-cents would generate $4.6 million annually. This tax would be assessed on groups that do not traditionally pay property taxes, such as medical groups, churches and non-profit organizations.

Aldermen Paul Havermale, R-3, said these are options worth considering, especially as the city faces an alternative of "a significant cut in city services or a privatization of some services."

Moore said city leaders should look to what other Illinois communities are doing in light of stagnant state shared-revenue payments.

"There are a number of other fees that other communities have that we don't have," Moore said.

The mayor described discussions on implementing a food-and-beverage tax, a utility tax, a property tax increase, or any other tax increase as "aldermen trying to be proactive."

"I think the aldermen are wanting to have a community-wide conversation about what Quincy looks like in the next 20 years," Moore said.

Moore said new taxes are not imminent, but will likely be discussed in the coming years.

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