With dismal sales tax receipts necessitating budgetary reductions and layoffs in the city of Geneseo, former economic development director Ken Schloemer believes a sales tax increase may be necessary.


With dismal sales tax receipts necessitating budgetary reductions and layoffs in the city of Geneseo, former economic development director Ken Schloemer believes a sales tax increase may be necessary.

“A sales tax is the fastest way to bring in revenue,” Schloemer told the city’s administrative services board on Jan. 26.

Geneseo’s sales tax rate currently stands at 6.25 percent. Schloemer is proposing the rate increase by a 1/2 cent.

In information provided to the board, Schloemer said Geneseo’s rate, which is lower than the 7.25 percent held by most Quad City communities, has not encouraged people to shop locally.

“The sales tax rate has not stopped Geneseo people, or Atkinson or Annawan people, from driving to the Quad Cities or elsewhere to spend their money,”?he said. “And people from the Quad Cities aren’t flocking to town to take advantage of our 6.25 percent rate.”

Schloemer said he estimates a 1/2 cent increase could generate an extra $600,000 in revenue.

In order to include a sales tax increase on the April 7 ballot, city officials would have to move quickly.

All ballot measures must be to the Henry County clerk’s office by Feb. 4. In order for the item to be on the ballot, a special city council meeting would need to be convened to approve the measure.

The public would need to be notified of that special meeting 48 hours in advance, said attorney Margaret Kostopulos, who represents the city.

“That’s a tight time frame, and it would be very difficult to meet,” said city administrator Eric Wiederhold, adding city officials might want more time to research and consider the issue.

If a sales tax increase was approved by voters, the additional revenue it would generate could only be used for city infrastructure, not payroll.

However, if additional funds were available for infrastructure, some finances in the general fund could be freed up for payroll use.

Wiederhold said he doesn’t know of any ballot measure that would directly impact the city’s payroll funds.

Still, even if the issue makes it to the April ballot and is approved by voters, additional funds will not be available to the city until July.

“You’d have to do a lot of selling to get a sales tax increase to pass,” said Schloemer.

Administrative services board member Curt Spensley said sales tax increases are generally
“very unpopular”?with voters.

However, Spensley said city officials would be interested in hearing the public’s opinion on a proposed sales tax increase, and encouraged residents to contact city hall.