GLEN ELLYN – A 1.5-percent food and beverage tax will go into effect March 1, 2019, in Glen Ellyn, following the Glen Ellyn Village Board's 4-2 approval Sept. 24.
The tax, which applies to food, alcoholic and nonalcoholic beverages purchased at restaurants for on-site consumption, and alcohol purchased for off-site consumption, will fund several capital improvement projects in the village’s Central Business District.
Projects include the construction of a new parking garage that will house between 300 and 375 spaces, a new train station, streetscape improvements, improved Roosevelt Road access, Civic Center improvements and a pedestrian underpass. In addition to the increased revenue from the tax, the Village Board will apply for grants to fund a portion of the projects.
The new tax is estimated to bring in between $825,000 and $1.2 million in funds for the projects, and it will add 75 cents to a $50 restaurant bill, 5 cents to a $3 cup of coffee and 23 cents to a $15 case of beer.
Common grocery items are exempt from the tax, as are food and beverages purchased at schools, hospitals, residential facilities, nonprofit organizations, vending machines and community festivals. The tax would be phased out in about 20 years, once the bonds issued for the projects are paid off.
Village President Diane McGinley supported the tax because she believes the capital projects will benefit the village for “many years to come.”
“I support it because the tax isn’t going to operating funds. It’s going toward capital projects that have long been identified as needs for the town,” she said. “The projects are supported by businesses and residents alike, and we need a way to pay for them.”
Trustees John Kenwood and Gary Fasules voted against the tax. Kenwood said at the meeting that while he supports the capital projects, he does not support implementing a tax to fund them.
“I don’t think starting a new tax is the way we should approach this,” he said. “It’s a burden on the restaurants, which is the hardest business to start and succeed in, and we’re essentially putting the burden on them.”
Steve Thompson, president of the Board of Directors of the Glen Ellyn Chamber of Commerce, told the Village Board chamber members are in favor of the tax because they want two new parking garages in the downtown area.
“I want to reiterate our support for the food and beverage tax and for the projects outlined in the capital budget, and we want to start the process of looking at a second garage,” he said. “[The projects] are needed to make Glen Ellyn more successful and are not just wants. [Chamber members] support the tax as long as you do the parking garage.”
The utility tax, which is the second-largest revenue stream in the Capital Projects Fund, has been declining, in part because of more energy-efficient homes and a lack of land phone lines. The village has collected $550,000 less in utility tax revenue over the past 10 years, and without additional funding streams, the capital plan would be in a $4 million to $6 million deficit after five years.