Champaign allocates $327,000 of sales tax to economic development

Champaign allocates $327,000 of sales tax to economic development

CHAMPAIGN — Small business took the spotlight Tuesday night as city council members discussed how they will spend $3 million in new sales tax revenue during the next fiscal year.

With the new revenue from a quarter-cent sales tax increase that took effect Jan. 1, a $327,000 portion will go toward economic development next year. It's a small slice of that $3 million, but residents and council members said it will be a key seed program to grow small businesses — especially as city officials look to encourage more growth among minority- and women-owned businesses.

"We are a growing community," said Champaign resident Patricia Avery, who is also president of the Champaign County NAACP. "And I think the more we see more diverse businesses, the better we look to the outside world."

Included in that $327,000 is $75,000 for a virtual small business incubator, which according to a memo to the city council would act as a "web portal providing access to all existing programming that supports small business startup."

For another $227,273, city officials will launch a small business assistance program "that could be used to address any missing areas within the existing small business assistance programs in the community," like buying down rent, equipment purchases employee training and other typical startup expenses, according to that memo.

Council member Will Kyles expects it will be a crucial program to give a leg up to startups that operate with very limited funds.

"It's not a cure-all, $327,000 is not a cure-all, but it's a step in the right direction," Kyles said. "And if we can continue to move toward that momentum and continue to build that momentum, we'll be a better city for it."

In fact, Kyles said the origin of the program could even be traced back to the discussion that began after 15-year-old Kiwane Carrington was shot dead by a Champaign police officer in 2009. The shooting set off a public outcry, which led to community meetings and many discussions about how to move forward.

Among those talks were how to catalyze business in the city's minority communities.

"We also talked about economic development, and we also talked about business and the state of parents and homes," Kyles said. "Some years later, months, years, we continue to work toward progress."

The city council also signed off on other spending priorities with sales tax money on Tuesday night: Nearly $1 million of the new revenue will go toward road repairs, and $277,000 will supplement the Champaign Public Library budget.

That latter earmark is a one-time allocation to get the library through the year without significant service cuts. Library officials are examining their budget now to figure out how to keep it solvent in the future.

Mayor Don Gerard said it was "phenomenal" that city officials were looking at additional spending programs Tuesday night. With the additional sales tax revenue, he said anyone who spends money in Champaign is investing in the city.

"We could not have cut our way to prosperity," Gerard said. "This was a shared responsibility."

Council member Deborah Frank Feinen was the only voter to turn down the sales tax when it was approved 8-1 last summer. However, she also praised the economic spending on Tuesday night.

"I do think the economic development piece is nice," Feinen said. "We haven't had significant funding — I don't know that we'd call this significant — but we haven't allocated money for economic development in a while, a long while."

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Sid Saltfork wrote on May 21, 2014 at 10:05 am

And over on the east side of Wright Street....?