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Bloomington increases hotel tax
By Karen Blatter BLOOMINGTON - The city council approved tax increases on hotel stays and restaurant meals Tuesday night. The council unanimously approved increasing the hotel/motel tax to 6 percent and created a food-and-beverage tax of 2 percent. The tax on a $100 room stay will now be $6, and a $25 restaurant tab will incur a 50-cent tax. The revenue will be used partly to stave off a predicted $4.8 million budget shortfall, which was caused by a decrease in sales tax dollars and increased city employee health-care costs. The food-and-beverage tax will become effective Jan. 1 and will not apply to groceries or packaged liquor. The tax would generate about $2 million a year for the city. The 6 percent hotel/motel tax is 0.5 of a percentage point more than what the council originally was considering. After a request from the Bloomington-Normal Convention and Visitors Bureau and the Economic Development Council, the council approved the higher rate. Jill Hutchison, interim director of the visitors bureau, said the tax will allow the bureau to do more to promote tourism and get people to stay in hotels and motels. She said because there was going to be a tax increase, the extra half-percent would not make that much of an impact. The two economic groups, which had received all of the previous 1 percent tax, wanted the extra half-percent to help balance budgets and work on encouraging more tourism to the area. The CVB and EDC's portion of the tax on an overnight stay will be a rate of 2 percent. The remain rate of 4 percent would generate $720,000 a year for the city. The tax will start later this month. Town of Normal officials said they will consider similar tax increases Monday. The money earned will be earmarked for Normal's downtown-renovation plan. The city and the town had jointly talked about increases in the two taxes to make sure both were on a level playing field. Bloomington is also working on other
options to address the shortfall. It may redo the city's health-care plans,
change the bulk-waste pickup program and make $1.8 million in departmental
cuts. |
