Council may vote on sales tax hike in Urbana

Council may vote on sales tax hike in Urbana

URBANA — City council members could take final action on a quarter-cent sales tax increase this week if they are satisfied with the direction of Mayor Laurel Prussing's budget.

Last week's discussion among city council members set up this week's potential for a vote. In their last meeting, a few council members said they were hesitant to proceed without considering all of Prussing's plans to close a projected $1 million budget shortfall.

The Urbana City Council will meet at 7 p.m. Tuesday in the Urbana City Building, 400 S. Vine St.

At that last meeting, council members nonetheless voted 6-1 to move the sales tax proposal along to the next step in the legislative process. Alderman Michael P. Madigan, R-Ward 6, was the only "no" vote.

Prussing said officials are working under a tight deadline if they're going to pass the one-quarter percentage point increase — they need to inform the Illinois Department of Revenue of any changes before Oct. 1.

The quarter-point sales tax increase would move the city's portion of the tax to 1.5 percent. Including the state and other county rates, the overall sales tax in Urbana would total 9 percent, up from 8.75.

That matches an identical sales tax increase the Champaign City Council approved earlier this year. If the Urbana City Council gives the green light, too, both taxes would be effective Jan. 1.

Prussing said the sales tax increase would bring in an extra $686,000 annually, new revenue it needs to cover losses from a Carle Foundation Hospital property tax exemption and rising costs of employee health insurance — which Prussing also blames on Carle.

Prussing would not elaborate last week on how she plans to deal with the remaining budget deficit, and a few city council members said they wanted to see those details on Tuesday before casting their votes.

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Orbiter wrote on September 02, 2013 at 8:09 pm

Since the money is to subsidize the hospital, instead of a general sales tax, they should implement a 5% tax on meats, foods & beverages with over half of calories from sugar, fat or alcohol, and foods with over 500mg sodium per serving.  Oh, and a 5% sales tax surcharge on all prepared or restaurant/fast foods would help, too.  Cigarette tax is already high enough, but another 50-cent tax on gasoline would encourage people to walk or bike.  Also, a 10% surcharge tax on clothing sized XL or larger.  This way the people most needing the hopsital will be paying for it.