The city’s month-old slate of sales tax increases — particularly a contentious new tax on prepared food and beverages — will return to the drawing board next month.
At Tuesday’s meeting of the city council, leaders agreed to delay the implementation of the new tax, which was set to take effect Aug. 1, and also explore options to address concerns brought forward by members of the restaurant community.
Those options include possibly expanding the tax base to include prepared food and drinks sold at convenience and grocery stores, along with a possible across-the-board reduction in the tax rate.
Also discussed was possibly ditching the slate of taxes approved last month entirely and instead instituting an across-the-board sales tax increase of around 1.5 percent.
Leaders took no formal action Tuesday, instead saying they will look at the issue again at their next meeting Aug. 9. In the meantime, the Aug. 1 implementation for the new tax will not be enforced and will possibly be delayed until October or even January.
City leaders voted June 14 to institute a 4 percent tax on package liquor sales, a 4 percent tax on prepared food and beverage sales, and a 4-cents-per-gallon increase in the tax on motor fuel — all of it in expectation of raising about $4.8 million in additional annual revenue for the city.
The new revenue was aimed at funding a long-standing list of community improvement projects projected to cost about $9.5 million, as well as a backlog of street and sidewalk improvement projects. In addition, the city is still facing a $40 million pension liability.
On Monday, about a dozen local restaurant owners gathered in downtown Carbondale to discuss their tax, which coupled with regular sales tax would put the surcharge on a meal purchased in Carbondale at more than 12 percent.
Council approves demolition of former Horizon Inn
A long-standing eyesore on the city’s east side, the former Horizon Inn, is finally coming down.
The council on Tuesday approved the transfer of $570,000 from the city’s local improvement fund to finally demolish the dilapidated building in the 800 block of East Main Street.
The low bid out of four received came from Dore and Associates Contracting Inc. of Bay City, Mich., for $538,400. The remaining money in the transfer will go toward contingency and engineering costs.
In late February, the city issued a request for redevelopment plans for the property with the requirement that the developer demolish the building within 180 days of conveyance of the property. The city received no proposals. The city acquired the property in late 2014.
Liquor sales to be allowed at farmers markets
The city council also amended its Class I liquor license classification to allow the sale of beer, wine and spirits at the city’s farmers markets.
Although tastings of such products have been allowed since 2013, Tuesday’s actions will allow vendors to actually sell regionally produced beer, wine and spirits.
The move follows a grant received last year from the USDA to study the impact of locally grown food and products. The study determined that offering products not currently for sale at the markets would “highlight the relationship between local growers and wineries, breweries, and microdistilleries that purchase many of their raw materials from local farmers,” according to the council’s agenda item.