September 8, 2017

Naperville Considers Sales Tax Increase, 5th Avenue Developer

If you shop in Naperville, you might soon notice a higher price tag than you’re expecting.

The Naperville City Council is considering raising local sales tax to cover increased budget costs including pensions and road maintenance.

Council could raise the home rule sales tax from .5 percent to one percent at their September 19 meeting.

But some council members and residents expressed concern that raising sales tax could deter shoppers from the city.

“Any sales tax increase makes Naperville less competitive,” said Colin Dalough, Naperville Area Chamber of Commerce Government Affairs and Business Development Director. “Customers are increasingly price conscious and extremely savvy.”

City Manager Doug Krieger said internet sales, which are not required to be taxed at the additional local rate, are losing Naperville $2 million a year.

Several city council members spoke of their support of the Marketplace Fairness Act, which allows states to compel online retailers to collect sales tax.

“We really have to fight for this marketplace fairness for at least a level playing field for our local brick and mortar stores that are collecting sales tax,” said Councilwoman Becky Anderson.

Some say the council should consider cutting costs and go through the budget process before raising taxes, but the mayor said that’s not possible.”

“We all agree that the cost side needs to be looked at simultaneously,” said Mayor Steve Chirico. “But because of the timeline, we are in a little bit of a time-sensitive matter.”

In order to increase the tax by January 1, the council must approve the increase by October 1.

Also of note:

Council has once again tabled discussion about moving forward with Ryan Companies as the developer for the proposed 5th Avenue Development.

Council heard concerns from community members who say they don’t think community opinion has been considered.

“Hit the reset button. Start over,” said resident Mark Johnson. “Do it again, and I think you stand a better chance of regaining our trust and cooperation.”

Although allowing Ryan Companies to create a plan would not cost the city any money, and the city can choose not to work with the company anymore, some council members did have concerns that choosing the developer might be final.

“Once we start going down this path, I’m concerned we might just continue to roll on,” said Councilwoman Patricia Gustin.

Many people were concerned that the initial task force chosen by council to narrow a list of possible developers came back with only one choice.

Some say they’d like the community to come up with a plan before choosing a developer, but Councilman John Krummen said working with a company is necessary.

“What we’re talking about here is a scope to be invented,” said Krummen. “It’s a very hard thing to do. I would suggest that city staff just does not have this ability to invent.

The group voted to postpone a decision for one month while Ryan Companies works with city staff to create a community engagement plan.

That decision was approved in an 8 to 1 vote with Councilwoman Becky Anderson voting ‘no.’

They will revisit the issue at their October 3 meeting.

Naperville News 17’s Beth Bria reports.

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