GENEVA - After more than 2 1/2 hours of debate, Geneva aldermen voted 6-4 March 13 to direct staff to draft an ordinance to rescind the 2 percent Places for Eating Tax for the next meeting March 20.
The 2 percent tax – to be collected by restaurants and passed on to the city – was approved last year to provide $1.5 million in revenue the city needs to maintain its current service level for core city services – such as public works and public safety – and provide funding for capital projects and capital equipment, officials said.
The tax was supposed to go into effect Jan. 1, but aldermen amended the ordinance to have it begin May 1, the start of the city’s fiscal year.
But local restaurant owners packed the council chambers at the Committee of the Whole as several made impassioned pleas against its implementation.
Wildwood owner Patrick Neary, Fiora owner Michael Anastasio and Geneva Wine Cellars owner Al Buchanan stood together, telling aldermen the tax is something they simply cannot afford.
“We can’t pass all of it on. It will make us uncompetitive with neighboring markets,” Anastasio said. “We are probably in the most fragile competitive business there is. … The best thing is this town has people who want to come to it. This tax is a financial disincentive. It will negatively impact all the retailers.”
Buchanan said he could not see any good reason for the city to single out restaurant and packaged goods sellers for this tax.
But 1st Ward Alderman Mike Bruno said because Geneva is not home rule, it has three legal options to consider: a downtown business district, a referendum for a city wide sales tax or the Places for Eating Tax.
The downtown business district was resisted, aldermen pulled the .5 percent sales tax referendum off the upcoming April 4 ballot at the request of the library officials, because of their $21.8 million referendum, Bruno said.
“We don’t have the flexibility of a home rule community,” Bruno said. “We don’t have many of the options people would like us to have.”