Shoppers at Pekin grocery stores will continue to pay a 1% grocery sales tax on Jan. 1, 2026, the same day a 1% state grocery sales tax is eliminated.
The Pekin City Council voted 4-3 on Tuesday for the city to establish its own 1% grocery sales tax so it can recoup the $1.5 to $1.7 million annually the city would have lost because of the state grocery sales tax's elimination.
Even though the state charges the sales tax, the revenue goes back to communities.
Gov. J.B. Pritzker signed legislation repealing the state grocery sales tax on Aug. 5. The legislation gives communities the option to have their own grocery sales tax up to a maximum of 1%.
"We all know the legislation was nothing more than a political move," said council member Karen Hohimer. "Our grocery sales tax won't be just paid by Pekin residents. Anyone who comes through town and buys groceries will pay it too."
Mayor Mary Burress said losing the state grocery sales tax revenue would have forced the city to raise another tax, possibly property taxes, "which would affect just homeowners."
Hohimer and Burress voted for the city grocery sales tax. Council members John Abel and Chris Onken also supported it. Council members Rick Hilst, Dave Nutter and Lloyd Orrick voted no.
Nutter said the council is slammed all the time about adding taxes, and this was an opportunity to not do that.
Orrick said not establishing the city grocery sales tax would give relief to the most needy in the community.
Hilst asked for a binding referendum on the issue to be placed on the April 1 ballot, but city attorney Jim Vasselli told him he couldn't legally request that option Tuesday.
The binding referendum could be an agenda item at a later council meeting.
Normal is among area communities that have established their own 1% grocery tax.
City will save nearly $2.4 million on police equipment and report writing system contract
The city will save nearly $2.4 million over the life of a 10-year contract the Pekin Police Department has with Axon LLC for in-car cameras, body-worn cameras, Taser 7's, interview room cameras and a report writing system.
Axon offered the discount on the contract that went into effect in 2022 because the police department has provided valuable feedback on Axon's report writing system, which has aided Axon in its nation-wide rollout of the system.
The contract total is now $3.5 million over 10 years. Council voted unanimously Tuesday for the contract change.
"In my 25 years of police work, I've found Axon is the only company whose products do what they're supposed to do and work the way they're supposed to work," said Pekin Police Chief Seth Ranney.
Business license fees raised; some businesses no longer need a license
Pekin City Clerk Sue McMillan was tasked with reviewing licenses, permits and fees associated with her office. The council approved her recommendations Tuesday.
After noting that business license fees were found in several places in the city code and many haven't been raised in 10-20 years or more, McMillan recommended a single fee schedule "to make city operations more transparent and efficient for businesses and the public" and raised license fees to cover city expenses.
Several businesses licenses are no longer needed now "because they were either antiquated or the city didn't perform any activities beyond issuing a license for them," McMillan said.
The eliminated licenses include amusements like bowling alleys, pinball machines, arcade games and pool tables, arborist, auctioneer, bed and breakfast, house mover, sound amplifier and taxicab.
The estimated revenue loss from those licenses is $6,200 annually. McMillan said the loss will be made up by increased fees for other business licenses, including an estimated $10,400 annually from liquor license fees.
These changes were approved 6-1 by the council, with Hilst dissenting.
There now will be a $50 charge for a replacement or duplicate liquor license and a $100 charge for a new liquor license after a business changes its organization information. The council vote was unanimous for these changes.
Council cuts recommended property tax levy in half
Pekin's property tax levy (total amount of taxes paid) will increase by 2.5% for the 2024-25 fiscal year.
The council approved the amount Tuesday, rejecting a 4.99% increase recommended by city staff. The owner of a home valued at $100,000 will see about a $12 increase.
The vote for the 2.5% increase was 5-2, with Orrick and Hilst dissenting. Hilst said he wanted no increase in the levy.
The total levy is $6,796,774, which includes $5,057,690 for the city and $1,739,084 for the Pekin Public Library. The library increase is 3.57%.
So long to the business registration license; two homes to be demolished
In other action Tuesday, the council:
- Agreed with city staff's recommendation that the city no longer require businesses to obtain a free business registration license. The decision will save the city $10,000 annually in software costs. The only other area community that requires a business registration license is Normal.
- Approved contracts with low bidder Beckman Excavating of Bartonville to demolish homes and replace the curb, gutter and sidewalk to Americans with Disabilities Act standards at 907 Catherine St. for $26,225 and 714 S. Eighth St. for $20,225. The votes were unanimous.
- Approved TIF funding of up to $39,065 over as long as 10 years for Ed and Kim Whitaker, who are building a $650,000 home at 2011 Remington Road. The vote was 6-1, with Hilst dissenting.
- Approved paying nearly $1.3 million to the Illinois Municipal League Risk Management Association for professional risk management services and insurance coverage for 2025 starting Jan. 1. The city will receive a 1% discount of $12,911 for paying by Friday. The city's annual $2,000 dues to the IML are included in the cost. The vote was unanimous. The city plans to take bids for the insurance package next year. The last time the package was bid was 2019.
- Approved once again not using property tax money to cover the principal and interest payments on a waste water treatment plant bond. Usage fees will continue to cover the payments. The vote was unanimous.
- Tabled until Nov. 25 a resolution for the city to commit to $5 million in funding so it can accept a $4 million federal grant obtained by U.S. Rep. Darin LaHood for engineering on a project to extend Veterans Drive from Sheridan Road to Interstate 74. Council members had several questions about what would be done with the grant money. The vote was unanimous.
