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New Taxes Implemented this Fall

Beginning Sept. 1, the City’s alcohol and hotel tax rates increase 1%, and a new local fuel tax of $0.02 per gallon sold within City limits will be implemented Nov. 1. These taxes are sometimes called “user fees” because they affect users of the items, in this case both visitors to St. Charles and residents.

These new taxes will fill an unexpected gap in our budget, caused by two continuing issues: a continuing loss of State funding and a property tax levy that has remained unchanged since 2009.

“We are facing a quarter-million dollar loss of revenue resulting from a reduction in the State’s Local Governmental Distributive Fund, along with a related administrative charge the State has applied to local sales tax,” said City Administrator Mark Koenen. “In addition, our current revenue structure has kept the property tax levy frozen for nine years, unable to meet the rising costs of doing business in 2018 and beyond.”

A directive from the City’s strategic plan challenged staff and council to find new sources of revenue that will help maintain the City’s current services and invest in the infrastructure St. Charles needs to continue to be a world class community, leader and innovator moving forward.

The fuel tax is expected to provide approximately $400,000, the alcohol tax $600,000, and the hotel tax $380,000 annually to the General Fund.

These taxes were approved by the City Council at the Aug. 6 meeting, after discussions at the March 19, June 18 and July 16 Government Operations Committee meetings. To keep up with the issues being discussed at public meetings, we have the schedule of all upcoming meetings, agendas and minutes of past meetings on our website at Agendas are posted 48 hours before a meeting.

updated Feb 05, 2019