EFFINGHAM – City Administrator Steve Miller reminded the city council on Tuesday about the 1% sales tax, the grocery tax and the amusement tax possibly being terminated at the start of 2026.
The 1% sales tax in 2024’s dollars is approximately $6.5 million. These funds do not include titled vehicles, groceries or medications, and the tax can be implemented in quarter increments. If the council passes the tax at a future city council meeting, Miller is required to submit the required paperwork by Oct. 1 for it to be implemented on Jan. 1, 2026.
Starting Jan. 1, 2026, the state of Illinois will no longer collect a 1% grocery tax. Instead, individual municipalities may charge it. In 2024 dollars, the city collected $650,000 – $700,000 from the 1% grocery tax.
The city also collects 5% of the profits from amusement centers such as the Effingham Performance Center. In 2024 dollars, the city collected $165,000 from this.
If the sales tax stays put, the funds would be used for different city projects instead of property taxes. Thus, property taxes would decrease in the city.
“This [passing the taxes] will indeed benefit our local residents because this isn’t to pursue a bond or to build a new addition to city hall,” said Mayor Mike Schutzbach. “This is simply transferring where the money’s going to be coming from to continue to pay our bills.”
The council wants to receive feedback from both the city commissioners and the community on the three taxes during the next city council meeting.
In other news, the council heard from Todd Shroeder from Lauterbach & Amen about the fire and police departments’ pensions. The city reviews the those pensions every four to five years.
Shroeder recommends the fire department pension contribution be just over $1 million for the year, and he recommends the police department pension contribution be just over $1.1 million for the year. These are about a 10% increase due to pay increases over time, new hires, benefit payments and more.
“We’re not in bad shape, but we can definitely be in better shape,” said Miller.
Meanwhile, local citizens Howard and Kimberly Manuel wish to construct a road that leads to their backyard and out to North Avenue. However, neighbors wish to leave the land as is or build a sidewalk instead of a road. City Attorney Tracy Willenborg recommends the city consider different widths of a possible road or sidewalk and bring ideas to the next council meeting.
City Planner Greg Koester updated the council on the Effingham 2050 Comprehensive Plan. Koester is planning one or two meetings to review the draft compiled so far; receive feedback from the steering committee; implement the feedback; have the Plan Commission, Zoning Board of Appeals and city council meet to receive more feedback; host one or two open meetings for community feedback; present it to the Plan Commission and then formally present it to the city council for final approval.
Public Works Director Jeremy Heuerman updated the council with the Santa Maria project. Heuerman said the team will be upgrading the pipe sizes, expanding sidewalks, adding street lights and more. With these improvements, Heuerman said they are still under budget. These funds are from TIF 1.
Police Chief Kurt Davis announced the new deputy police chief: Tom Webb.
The next city council meeting is scheduled for Sept. 2 at 5 p.m.