 Since then there has been a bit of confusion and concern expressed
by local citizens who noticed the tax but couldn't identify why they
were being charged more. Chuck Conzo, treasurer for the city of
Lincoln, said Tuesday evening that he and members of the city
clerk's office had fielded several calls regarding the tax.
On Wednesday, staff at the Lincoln/Logan County Chamber of
Commerce office said they too were receiving calls about the
increased tax.
In a February 2011 meeting of the Education Cooperation
Committee, Regional Superintendent of Schools Jean Anderson stated,
"if it isn't taxed now, it won't be," and that may be the best way
to begin understanding the new tax.
Prior to the first of the year, the total sales tax charged on
consumable items in Lincoln was 7.5 percent. This tax was applied to
items such as paper products, clothing, cigarettes, alcohol, soda,
candy and other convenience items.
The things it was not applied to included groceries, which is
locked in at only 1 percent by state law, medications and other
service-oriented costs where tax does not apply.
When the education committee was promoting the tax, they stated
clearly the tax would not affect these items, nor would it affect
motorized vehicles, farm equipment and farm supplies.
The tax does apply to food purchased in restaurants or fast-food
stores, but it doesn't apply to rates paid for motel or hotel
rooms.
Now that the tax is being collected, the next questions to come
to mind might be how the money is distributed in Logan County and
how the various schools in the county will use the funds.
When sales tax is collected at the point of sale, retailers are
obligated to remit the entire amount to the state of Illinois. The
state keeps its share of the tax and distributes the rest back to
the various taxing bodies, such as the city, or in this case, the
schools.
The taxes are remitted to the state monthly, and generally
speaking, the state redistributes the money within 90 days.
When the committee was working on the 1 percent tax for Logan
County, it was estimated that while the tax would begin to be
collected Jan. 1, the first payment to the schools would not occur
until April. After that, payments should be made by the state on a
regular basis.
When the money is distributed, it will go to Anderson at the
Logan-Mason-Menard Regional Office of Education. She will have a
formula for dividing the funds, based on the student population of
each school. With the formula in place, checks will then be issued
to individual school districts.
Once the schools have the money, it cannot be used for the daily
running of their schools. The money must be earmarked for building
repairs, renovation or construction, and it can also be used to make
payments on existing school bonds.
Simply put, bonds are loans secured by property tax levies. When
schools need to make upgrades to their facilities or encounter major
repairs that have to be made, such as complete heating and boiler
systems, these bonds, funded by property taxes, are used to pay the
bill.
In February and March of 2011, the committee along with the
chamber hosted public meetings to explain the sales tax and justify
the need for this type of revenue.
Schools throughout the county have a laundry list of work that
needs to be done on their facilities, ranging from new heating
systems, to energy-efficient lighting and windows, and even new
roofs and in some cases new buildings.
The long-range plan for the revenues received from the 1 percent
tax is to be able to fund these types of projects without taking out
bond loans and without increasing levies on property tax.
In addition, in some cases, property owners may even see their
taxes go down as a result of the new sales tax.
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During a meeting at the Lincoln Community High School in March,
LCHS District Superintendent Robert Bagby said the LCHS board had
put in writing that they will lower their property tax levy when the
sales tax takes effect.
At that meeting, it was also noted that West Lincoln-Broadwell
had made a similar pledge.
Mount Pulaski schools pledged to use half of their sales tax
revenue to lower property taxes and the other half to do some new
construction or renovation of the oldest sections of the high
school.
Superintendent Mary Ahillen of District 27 said there is a great
deal that needs to be done in several of the schools she
oversees. With the sales tax in place, she said the work could be
done without raising property taxes.
Chester-East Lincoln School representatives said they would first
have to use the money to pay for a boiler project. Once that is
done, they too promised to work to reduce their property tax levy.
In addition to seeing a decrease in their property taxes, Logan
County residents will also benefit from the fact this county draws
in a large number of people each year who do not live here but do
spend money here.
With Interstate 55 on the outskirts of Lincoln, the number of
drivers who pull off the highway is enormous. When they pull off,
they visit the local gas stations and convenience stores. They
purchase chips, soda and other taxable items. They may visit one of
the drive-thru restaurants for a meal to-go or stop in at any one of
several restaurants in the area for a relaxing meal. Each dollar
they spend in Lincoln will support Logan County schools.
When folks come in for the annual Lincoln Art & Balloon Festival,
visit any of the several tourist sites in Lincoln and Mount Pulaski,
or attend any activity in Hartsburg, Emden or Elkhart, the money
they spend will be taxed, and that tax will support the Logan County
schools.
When the committee was working to pass the referendum for the tax
in April of 2011, this was one of their key selling points. In
public meetings, they presented statistics about dollars spent by
visitors to the county and showed that in the end the revenues
recovered from the tax would far exceed anything that could be
levied on property tax, due in large part to these out-of-town
visitors.
The 1 percent sales tax is being used in Logan County according
to Illinois state laws as provided in the county school facility
occupation tax, 55 ILCS 5/5-1006.7.
To read the law in its entirety, follow this link:
http://www.ilga.gov/legislation/ilcs/
fulltext.asp?DocName=005500050K5-1006.7.
[By NILA SMITH]
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