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Sales tax hike, fuel tax on Oswego agenda : News : Oswego Ledger-Sentinel : Hometown Newspaper for Oswego and Montgomery, Illinois
Sales tax hike, fuel tax on Oswego agenda
Sales tax hike, fuel tax on Oswego agenda

by John Etheredge


The Oswego Village Board will consider a recommendation to increase the village's Home Rule sales tax and impose a local four cent per gallon motor fuel tax when they gather for their next regular committee-of-the-whole meeting on Tuesday, April 1.

The meeting will begin at 6 p.m. at village hall.

Village staff have proposed the tax increases to provide funding to pay for the village's annual street maintenance program, future vehicle purchases for the village police and public works departments, and to fund an ongoing 20-year capital improvement program (CIP).

The tax increases would be included in the village's 2014-15 fiscal year budget, which the board is expected to approve prior to May 1, and the start of the village's new fiscal year.

According to the proposed budget on display on the village's website at, village staff began informing the board about the costs "associated with future village infrastructure improvements" during the previous two fiscal years. Those discussions led to the creation of CIP.

During his annual 'State of the Village' address to the Oswego Chamber of Commerce last month, Village President Brian LeClercq said the village was facing what he described as a "huge shortfall" in funding for its annual street maintenance program.

LeClercq presented information prepared by village staff that estimated the annual street maintenance funding deficit at $837,000 for the 2015 fiscal year; $1.6 million in 2016; $1.5 million in 2017 and $1 million in 2018.

Mark Horton, the village's finance director, told the board last week he believes a one percent increase in the village's home rule sales tax "would be a logical choice" to provide the additional funds the village requires to maintain local streets.

He estimated the one percent increase would bring in $1.8 million during its first year on the books and then increase in the coming years as the village grows and adds more retail businesses.

The current sales tax on non-food and prescription drug items in the village is 7.75 percent. By comparison, the cities of Aurora and Yorkville have a sales tax of 8.25 percent, while Montgomery has two sales tax rates. In the Kendall County portion of the village the sales tax rate is 7.25 percent, while in the Kane County portion of the village the sales tax rate is seven percent.

Referring to a one percent increase in the village's sales tax, Horton said, "That keeps us in the ballpark with our neighboring communities, it's least offensive, it's the least burden and it does not burden our staff since it's collected by the state" and reimbursed to the village.

Horton noted that a study completed for the village last year found that 51 percent of all the sales taxes paid in the village are paid by people who live outside of the village.

Continuing he said of the tax increase, "It would be a burden that is transferred to everyone that shops in the community and uses our roads, etc."

In proposing a four cent per gallon local motor fuel tax, Horton suggested the village could use revenues from the tax to help fund a village vehicle replacement program and other capital improvements.

He estimated the tax would generate an additional $700,000 annually.

Horton noted the village is faced with the continuing cost of replacing between seven and eight police squad cars each year, and purchasing dump trucks and other costly vehicles for the public works department.

Horton, however, said he believes the combination of the two tax increases will cover the village's capital infrastructure and vehicle purchase needs in the years ahead.

"By doing the local Home Rule sales tax and the local motor fuel tax I'm pretty confident we won't be coming back to you (with more requests for capital funding)," he told board members.

LeClercq asked board members to review the information so they can have a "fresh discussion" at their meeting next Tuesday.

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