New Champaign County sales tax takes effect Friday
CHAMPAIGN – Liz Hawkins updated her cash register Wednesday after closing Skins 'N' Tins for the night, and many Champaign County business owners will do the same before a 1 percent sales-tax increase goes into effect Jan. 1.
The owner of the drum shop at 29 E. Main St. and others will have to update their accounting software to properly charge and report the tax, which voters supported in April and the county board codified in June.
The revenue generated by the 1 percent increase will be appropriated entirely to Champaign County schools to help pay for construction projects. School districts still plan to make good on a promise to voters that residents will see a break in their property taxes, said Jane Quinlan, the Regional Office of Education superintendent.
Laura Weis, the chief executive officer and president of the Champaign County Chamber of Commerce, said the increase will bring the total sales-tax rate in the cities of Champaign and Urbana to 8.75 percent. That number varies in other municipalities, depending on their tax policies.
Quinlan said her office expects to collect $16 million in sales-tax revenue, which will be distributed in proportions to Champaign County schools based on their size.
Among the projects Champaign schools have been planning since before voters supported the tax increase are the reconstruction of Booker T. Washington Elementary and an expansion of Garden Hills Elementary.
"I think when you look at the age of the buildings in the county, there was a great need for this," Quinlan said. "And I think that many of the districts will use it to make their buildings more energy-efficient, which will save money over time."
In the past 40 years, no major work has been completed on about half the school buildings in the county, Quinlan said.
Rantoul city schools plan to use the money to install energy-efficient facilities in all their buildings, Quinlan said. That includes geothermal ventilation systems, new lighting and insulation and updated electrical systems. They will also replace all single-pane windows with double-pane windows.
"Most people are doing plans that are very similar to what they said they were going to do prior to the" April referendum, Quinlan said.
St. Joseph-Ogden High School will use about half the money it's receiving to pay for outstanding bonds.
"The schools did not receive any revenue specifically for this purpose in the past," Quinlan said.
The tax increase is expected to provide some relief for residents, as the school districts plan to use money they don't spend on construction to abate property taxes. Some are even budgeting for abatements, Quinlan said.
Weis said she has not heard of any opposition to the sales-tax increase from county businesses.
Terry Hawkins, a co-owner of Skins 'N' Tins, said he does not think it will affect sales.
"Everything just gets more expensive," he said.