CARBONDALE — For nearly a 10-year period, sales tax dollars in Carbondale have remained pretty flat.
For example, in fiscal year 2008, Carbondale collected just a bit more than $6 million in sales tax revenue from the state. In FY2018, the city collected $5.8 million from the state.
With its home-rule imposed sales tax, the city collected about $4.9 million in FY2008 and about $9.9 million in FY2017, but that disparity is because of several quarter percent increases.
The state municipal sales tax is 6.25 percent. The breakdown goes like this: The state gets 5 percent, the city gets 1 percent and the county gets 0.25 percent. Carbondale is also a home-rule city because its population is more than 25,000 as of now. Because of that home-rule status, it can impose sales tax increases at quarter-percent increments.
Carbondale’s home-rule sales tax stands at 2.5 percent, making the overall tax rate 8.75 percent. Add in a 1 percent School Facilities Sales Tax throughout Jackson County and it makes the rate 9.75 percent for everybody. Even more so, if a person is eating at a restaurant, there is a 2 percent food and beverage tax, making the rate 11.75 percent on meals purchased at a restaurant. There is also a 4 percent packaged liquor tax.
While the tax rate has increased, the amount of revenue brought in per quarter-percent has stayed about the same. In FY2008, the city brought in about $1 million per quarter percent. In FY2017, it brought in about $993,987.
Carbondale City Manager Gary Williams said that even though the enrollment at Southern Illinois University Carbondale is down several thousand students, the city has shown stability because it is a regional economic center.
“We are the retail center for the region,” he said. “So, in spite of the enrollment declines, we continue to get sales tax because people come here to shop. It is also a lot of people that come in here to work every day due to SIU and SIH.”
The amount of state sales tax dollars collected could be tied to national and state-related occurrences. In FY2009, there was the Great Recession, which could be the reason for sales tax revenue from the state dropping about $211,000 from the previous year.
“I think people will agree that nationally, people were nervous about buying,” Williams said. “People lost their jobs, there was uncertainty about the future, and banks quit lending money. People hunkered down and stopped spending money."
The city slowly increased its revenue from the state as it got further away from the recession. In FY2017, the city saw about a $231,000 drop in state sales tax dollars once again. This time, Williams said a contributing factor could have been the state’s budget crisis.
As for home-rule tax dollars, for FY2017, there's about a $43,000 drop for every quarter-percent increment.
“My gut tells me it is still the state climate,” he said. “We just got the budget passed in June.”
Williams said the city relies heavily on its home-rule status to generate additional income for the city. He said cities that don't have it rely more on property taxes. There could be some concern in city hall about the city’s home-rule status because if Carbondale’s population falls below 25,000 people when the 2020 U.S. Census is completed, that status could be gone.
Cities below 25,000 people can put home-rule status on a referendum and let the public vote for it, which is why cities like Marion and Murphysboro have the distinction. This could be Carbondale’s fate in 2020.
If this happens and the Carbondale residents vote to remove its home-rule status, it would take about $10 million out of the city’s budget.
“The only way we could take $10 million out of the budget would be massive cuts to personnel and services,” Williams said. “Or it is a huge real estate levy … or a combination of the two.”
Additional home-rule sales tax increases, along with implementation of the food and beverage and package liquor tax, were ways to mitigate rising police and firefighter pension costs. Williams said the taxes were also a way to provide funding for community investment projects that have been neglected for many years.
“We think that investing in the community will have a payoff and will help things like the enrollment problem at SIU,” he said. “We look like we care about our town.
“We are always talking about costs and we are always talking about how to be more efficient.”