Woodstock City Council votes to implement 1 percent home rule sales tax

WOODSTOCK – The city of Woodstock will see a sales tax increase Jan. 1 after City Council members decided Tuesday to implement a 1 percent home rule sales tax.

City officials first began to discuss the tax in July, a month after Woodstock became a home rule community. A public hearing was held Aug. 1 on the proposed tax, and residents had mixed reactions.

A diversified tax base is one benefit residents saw, whereas some business owners – particularly those who sell large-ticket items, such as lumber and building materials – have criticized the plan because it could chase away clients to surrounding communities with lower rates.

Council members discussed the possibility of offering a rebate program to those large-sale companies but won’t discuss the idea until a future City Council meeting.

The tax will exclude titled vehicles, prescription and nonprescription medicine and groceries, excluding hot food, candy, soda and alcohol. City officials estimate that the tax will bring in an additional $2.5 million annually.

The council voted earlier this year to lower its 16 percent portion of a resident’s tax bill by 10 percent, and the revenue will offset those costs.

Woodstock’s sales tax rate now will be a quarter of a percent above some neighboring communities, such as Crystal Lake and Algonquin. Both Crystal Lake and Algonquin have sales tax rates of 7.75 percent.

Council member Dan Hart, who owns D.C. Cobb’s as well as with other businesses, said that he has heard split reactions from Woodstock residents, but would support the raise. He said the roads would have a bigger effect on Woodstock’s future growth than a higher sales tax would.

“Some people are very upset with the idea, and some people support it,” Hart said. “Yes, this is a raised sales tax, and as a business owner, I support it.”

Council members largely have been supportive of the plan throughout the process, with the exception of Jim Prindiville, who cast the sole dissenting vote Tuesday.

“I think we would be better served if we would cut expenses to meet our goals,” he said. “My experience talking with residents … is the No. 1 thing they see in most communities is more shopping options. They’d like to see that here. In that sense, I am concerned this proposed tax runs risk of undermining our efforts to fix those underlying problems to create more shopping opportunities.”

Revenue raised from taxes is intended to go toward property tax relief and infrastructure improvements, with a focus on the city’s roads, council members said.

Mayor Brian Sager emphasized the city’s history of “fiscal responsibility” and said it is time to implement a sustainable revenue to go toward those needs.

“For many years since the economic downturn, we have had to make difficult decisions,” Sager said. “We are dealing with less full-time staff than we did six years ago. We are dealing with less of a property tax rate being imposed from a municipal perspective. We haven’t taken the allowable [Property Tax Extension Limitation Law funds] for the previous six years. … We heard loud and clear from residents over and over again that property taxes are too high. … We did something about it within the realm of our authority.”

The tax will go into place Jan. 1.