Johnsburg will begin charging an additional half-percent sales tax in 2026, bringing its total local sales tax rate to 1%, and its total tax rate for non-food purchases to 8.25%.
The Village Board on Tuesday voted 3-3 on the tax increase, leaving the tie-breaker with Village President Ed Hettermann, who voted in favor of higher tax.
The yes votes came from Trustees Jamie Morris, Mike Fouke and Scott Letzter. Trustees Josh Hagen, James “J.D.” Sylvanus and Keith Von Allmen voted no.
The debate, at times, got a bit testy, with trustees disagreeing on timing and whether the village should have a plan on where to spend additional revenues before taxing for them.
“We know we have projects we want to do,” Hettermann said, including parking lots and road repaving. “If we wait even until the next cycle, we lose $300,000 to $600,000.”
If the Village Board had not approved the tax increase by Oct. 1, the next deadline would be April 1, and collection wouldn’t begin until July 1.
It’s also not assured that state lawmakers won’t take away the non-home-rule sales tax exemption before then, Hettermann said.
“If this goes away ... it is a big mistake on the village’s part,” he said.
An August 2024 change in the law allows small municipalities that don’t have home rule to raise their sales tax rates by up to 1%, in quarter-percent increments, without voter approval. Prior to then, Illinois law required non-home-rule communities to get voters’ approval to increase their sales tax.
Johnsburg voters approved such a half-cent local sales tax referendum in 2016, bringing the village $600,000 a year earmarked for road and other capital projects.
Those road projects now cost about $300,000 per mile, Hettermann noted.
Hagen and others who voted against the increase said they wanted a better idea of where the money would be spent before approving the additional tax.
Without a plan, “it is a tough pill for me to swallow,” Hagen said, adding that he wasn’t sure that the possibility of the taxing power going away “is a reason to increase it without a plan.”
The board has been debating a local sales tax rate increase since earlier in September. A special meeting was held Tuesday to vote on the ordinance before Oct. 1 so it the village can forward it to the Illinois Department of Revenue and begin collection on Jan. 1.
Much of Johnsburg’s local, non-food sales tax comes from the Walmart store at 3801 Running Brook Farm Blvd. An idea to create a Route 31 business district, and only charging the increased sales tax there, was put aside as it would take much longer to create than deadlines allow.
Letzter suggested the additional taxes could go towards a fund that aids village businesses.
A Walmart employee who attended the meeting said she was concerned that because of a higher tax rate, shoppers may decide to go elsewhere - particularly those who live in Wisconsin but order from or shop in the Johnsburg store.
Letzter responded: “I can’t believe ... 50 cents on 100 bucks will turn people away.”
In July, Johnsburg also voted to continue collecting the 1% grocery tax. Officials said the grocery tax – which the Illinois General Assembly turned over to municipalities to decide on – brings Johnsburg $405,000 a year. Again, a majority of that tax comes from the Walmart store.