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City sales tax revenue is rebounding

Fairview Heights sales tax is rebounding from a spiral that began with the coronavirus pandemic in 2020.

In a report to the City Council, Director of Finance Gina Rader called attention to signs of recovery.

The most recent numbers are for April 2021. The city’s sales tax allotment reached $671,227.28, an increase of more than 129 percent from the same time in 2020 when it was $292,786.39. The upward trek was also reflected for March sales reported in June, which was $779,053.20, 64.4 percent more than in March of 2020.

There is a three-month lag between the time sales tax is collected by the Illinois Department of Revenue and the city receiving its share. The tax is collected from local retail businesses and service providers.

In Fairview Heights, the funding of government operational costs relies heavily on the success of its retail businesses because the municipality collects no real estate tax from local property owners.

The city receives 1 percent of sales tax income from purchases of goods and services that is funneled through the state.

Several weeks of severely reduced retail sales during the pandemic lockdown affected how much money was available for the municipal government.

The City Council voted in 2020 to approve collection of a utility tax and a telecommunications tax from its residents to help offset the dwindling sales taxes.

The July report from Rader also, for the first time, included information concerning the city’s income from the sale of cannabis at the Ascend dispensary opened this year.

The first full month of revenue from that source, Rader indicated, totally $69,911.33, a bit less than the average monthly amount projected in the city’s budget, which is about $78,850 on the basis of an estimate of $945,000 per year.

Ascend, operating at 114 Commerce Lane in a structure formerly used as a Babies R Us retail store, functions under the corporate name of Health Central LLC, doing business as Illinois Supply and Provisions, and is the same group that owns similar dispensary facilities in Springfield and Collinsville.

In late 2019, the Fairview Heights City Council acted on two pieces of legislation concerning the income received from the cannabis dispensary.

The first one concerned the city’s authority to implement a sales tax on the sale of cannabis within its boundaries. An ordinance approving the collection of such a tax at the state-mandated allowable maximum of 3 percent was approved.

Also included in that legislation was the earmarking of the proceeds from this tax with 50 percent designated toward the city’s obligation toward the police pension fund, 25 percent toward the debt retirement for the new recreation complex that opened in May of 2019 and another 25 percent to the general fund that is used to finance day-to-day expenses and costs to operate the city.

Reporting by Randy Pierce of the Fairview Heights Tribune.

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