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Homewood imposes ‘places for eating’ tax

Dudley Elvery co-owner The Cottage Dixie questions Homewood Village Board about 2 percent 'places for eating' tax it will be

Dudley Elvery, co-owner of The Cottage on Dixie, questions the Homewood Village Board about a 2 percent "places for eating" tax it will be imposing effective May 1. | Ginger Brashinger~For Sun-Times Media

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Updated: February 13, 2014 5:34PM



Hoping to offset some of the sales tax revenue it is losing in the wake of Kmart closing, Homewood is imposing a 2 percent “places for eating” tax that will apply to businesses that both sell food and provide a place to eat it.

At least two other Southland towns — Chicago Ridge and Palos Hills — have such a tax.

Towns that are not home-rule communities, such as Homewood, are limited in their ability to raises taxes or create new ones. So the village is doing what it can.

“We’ve been leaving money on the table for quite some time,” Mayor Richard Hofeld said.

The board recently approved the 2 percent tax by a 4-to-1 vote. Trustees Tom Kataras and Lisa Purcell were absent.

Village manager Jim Marino said Homewood has been losing revenue since 2008, while expenditures have risen. He said because Homewood is not a home-rule municipality, options for raising revenue are limited. The village’s portion of the regular sales tax is locked in at 1 percent.

The village’s deficit last year was $663,000, and there are projected deficits of $333,000 this year and $719,000 in 2015, he said.

Marino and finance director Dennis Bubenick said with the 2 percent “places for eating” tax, they estimate additional revenue of $760,000 annually.

Marino said the closing of Kmart in December will cost the village about $300,000 in sales tax revenue. No other source would replace that until Wal-Mart opens in the spring of 2015, he said.

“This tax is the only alternative we have that will bring in a significant enough amount of revenue to meet our needs,” Marino said.

Dudley Elvery, co-owner of The Cottage on Dixie, asked “to what extent has the regressive nature of the tax been examined in terms of long-term impact on economic development ... because if we’re going to grow Homewood economically, we have to be careful that we maintain a business-friendly atmosphere.”

Palos Hills enacted a places of eating tax of 1 percent that took effect in 2010, and Chicago Ridge, which is a home-rule town, has a 1 percent tax that took effect in 2013.

Trustee Anne Colton was the lone dissenting vote, saying she would prefer a graduated tax beginning at 2 percent and dropping to 1 percent when Wal-Mart opens in 2015.

Trustee Ray Robertson said although he would be “more comfortable” with 1.5 percent, he approved the tax.

“We would have to lose eight, 10, 12 employees” without the new money coming in, Robertson said.

Village officials said they will take time to “sort out” which merchants in the village will be subject to the tax before imposing it on May 1.



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