Flossmoor village board members Monday are likely to ask residents to back a proposed referendum to raise local retail sales taxes by 1 percent. If approved by the board, the proposed sales tax initiative will appear on the ballot in the March 20 consolidated election.
Flossmoor village board members Monday are likely to ask residents to back a proposed referendum to raise local retail sales taxes by 1 percent.
If approved by the board, the proposed sales tax initiative will appear on the ballot in the March 20 consolidated election.
The agenda for the Dec. 4 meeting — which begins at 7:30 p.m. at the village hall, 2800 Flossmoor Road — includes the referendum proposal.
Flossmoor is not a home rule community and the proposed sales tax hike needs to be approved by voters in the village.
According to the state’s guidelines, non-home rule sales tax does not apply to food that is purchased in grocery stores, except for alcoholic beverages, soft drinks and food that has been prepared for immediate consumption. The tax also does not apply to prescription and non-prescription medicines, drugs, medical appliances and insulin and other materials used by diabetics.
In a Friday interview with the H-F Chronicle, Flossmoor Mayor Paul Braun stressed that the village is not seeking home rule powers in March. Homewood is expected to seek home rule status in the consolidated election and Braun said he does not want Flossmoor residents to think the village wants more than the sales tax increase.
“We are a non-home rule community,” Braun said. “We are not asking voters for any other authority.”
Braun said it’s difficult to ask for any sort of tax hike but that Flossmoor is facing a structural deficit in the all-important general fund that is expected to climb to $1.5 million in the next three years. During strategic planning sessions this summer, village board members agreed that additional revenues are needed to head off the deficit.
Flossmoor is experiencing rising costs, especially for aging infrastructure in need of repair. Water loss due to leaky pipes continues to be a serious problem, and the village is spending $1.2 million to install new water meters in every home in the community.
“We’re facing a shortfall in the general fund,” Braun said. “Unless something is done, we will be burning though our reserves in 2020. Are we broke? Far from it. But we need to know what’s coming down the pike.”
Village officials say cutting into the fiscal reserves would threaten Flossmoor’s stellar AA+ bond rating from Standard & Poor’s, which allows the village to issue bonds at an extremely favorable rate.
Of all the possible ways to increase revenues, the sales tax hike will put the least burden on Flossmoor residents, Braun said. The proposal is possible largely because of Flossmoor’s Meijer superstore, which opened in June 2016. Village officials believe that many, if not most, of the shoppers at Meijer come from outside Flossmoor and the additional 1 percent of sales taxes will be passed along to them.
With the sales tax increase, Flossmoor stands to gain between $550,000 and $600,000 a year, Braun said.
The Meijer complex is the most successful example of Flossmoor’s economic development strategy, which calls for additional retail along Vollmer Road in the village’s southwest corner. But Braun said economic development comes with a cost. For example, the police department needed to add two more officers after Meijer opened. He said the village should not overlook opportunities to enhance revenues that are related to economic development.
Braun said he does not expect the additional sales tax will have a negative effect on other retail outlets in Flossmoor. He said he plans to meet with members of the local business community about the proposal. Other neighboring communities have already increased their sales taxes, he said. Olympia Fields residents approved a sales tax increase earlier this year, largely to take advantage of the town’s newly-opened Walmart store.
Flossmoor’s village board is not allowed to lobby for the referendum, Braun said. Board members, however, are expected to ask citizens to form a committee to help educate the community on the merits of the proposal. A similar committee was established the last time Flossmoor voted to put a referendum issue on the ballot. That was in 2012 when the village asked residents to approve a bond issue to pay for new water mains in Flossmoor, a measure that was overwhelming approved.
Also, the village board plans to host at least two informational sessions on the sales tax proposal, Braun said. Dates have not been set but one is likely to be on a weeknight and the other during a weekend.
It’s no secret that the village has been considering the sales tax increase. Board members voiced general support for the proposal at a Sept. 25 special meeting. Braun was asked if he has gotten any negative feedback on the possible tax hike.
“I have not heard from anyone,” he said. “No one has voiced any opposition.”