County Board: Sales Tax Referendum
Referendum Information Library
Peoria County does not, and cannot, take a position on the sales tax referendum. To serve the public, however, Peoria County offers the following information purely for educational purposes. Peoria County does not intend any of this information to suggest that citizens should vote one way or another on the sales tax referendum, but presents this information so that citizens will cast informed votes, whether for or against the sales tax referendum.
In January 2009, the County Board passed a resolution to place a referendum on the April 7 Consolidated General Election ballot that asks voters to approve a 1/4 of one percent sales tax increase for public facility purposes. If the referendum is approved, money raised from the sales tax increase will be used to help fund construction of the Peoria Riverfront Museum.
The referendum will read:
To pay for public facility purposes, shall Peoria County be authorized to impose an increase on its share of local sales taxes by one quarter of one percent (¼%) for a period not to exceed twenty (20) years? This would mean that a consumer would pay an additional twenty-five cents (25¢) in sales tax for every $100 of tangible personal property bought at retail. If imposed, the additional tax would cease being collected at the end of twenty (20) years, if not terminated earlier by a vote of the county board.
It is important to note that the sales tax increase applies to Peoria County residents and visitors alike; this is not a property tax increase in which the burden is borne solely by Peoria County property owners. The sales tax increase is expected to cost each resident of Peoria County approximately $17.00 annually, although this amount will decrease as visitor spending increases.
It is also important to note that the sales tax increase will end after twenty years unless an extension is granted by the voters. Voters would have to approve another referendum before the twenty-year expiration in order for the tax increase to continue beyond its original term. The County Board, however, can vote to end the tax early. If the referendum is passed this April, the sales tax increase will not go into effect until January 2010.
If the referendum passes, the sales tax increase would not apply to:
Titled goods such as automobiles and boats
Food purchased for home consumption (i.e. at a grocery store)
Qualifying prescription drugs and medical supplies
Town Hall Meetings
Peoria County Board Members are hosting a series of town hall meetings in March to raise awareness of the sales tax referendum and educate their constituents on the financial impact of the referendum so voters can make an informed decision on April 7. Town hall meetings are open to the general public and time will be reserved for questions and answers. Please consider attending one of the following town hall meetings to learn more about the Peoria Riverfront Museum and the sales tax referendum.
March 5 @ 6:30 p.m.
Kickapoo Creek Winery, Edwards, IL
Hosted by Carol Trumpe (District 15) and Bob Baietto (District 12)
March 7 @ 9:00 a.m.
Farmers State Bank auxiliary building, Elmwood, IL
Hosted by Brad Harding (District 16)
March 9 @ 6:30 p.m.
Bradley University, Baker Hall Auditorium B51
Hosted by Andrew Rand (District 4) and James Dillon (District 7)
March 10 @ 6:30 p.m.
Neighborhood House, Matthew St, Peoria
Hosted by Bonnie Hester (District 1) & Lynn Pearson (District 3)
March 17 @ 6:30 p.m.
Dunlap Valley Middle School
Hosted by Brian Elsasser (District 14)
March 30, 7:00 - 9:00 p.m.
Woodrow Wilson Primary School
Hosted by Phil Salzer (District 8)
March 31 @ 6:30 p.m.
Friendship House, Madison St, Peoria
Hosted by Lynn Pearson (District 3) & Bonnie Hester (District 1)
April 2, 6:30 p.m. - 8:15 p.m.
Northwoods Community Church
Hosted by Brian Elsasser (District 14)
April 4, 9:00 - 11:00 a.m.
Hanna City Fire House, Hanna City
Hosted by Brad Harding (District 16)
April 4, 1:00 - 3:00 p.m.
Illini Bluffs High School, Glasford
Hosted by Brad Harding (District 16)
This page will be updated with more meeting locations as they are scheduled.
Town hall meeting promotional flyer
Frequently Asked Questions
How can we be certain the sales tax increase will end in twenty years?
By law, this sales tax increase can only be extended if voters approve another referendum requesting an extension before the twenty-year expiration.
How do we know the money raised from the sales tax increase will go toward construction of the museum? The museum isn't mentioned in the referendum.
Illinois State law determines how the referendum is worded. If the referendum passes, the County Board has committed to issuing up to $40 million in Revenue Bonds for the museum.
What if more than $40 million is needed to complete construction of the museum?
Peoria County has pledged to contribute $40 million from the sales tax increase. If more money is needed, the Museum Collaborative will need to seek additional funding from other sources.
How do you know the sales tax increase will raise $40 million?
Historical figures illustrate that 1/4% in sales taxes generates an average of $4.15 million annually.
$4.15 million annually for 20 years is over $80 million. If only $40 million is spent on construction of the museum, where does the remaining $40 million go?
Issuing Revenue Bonds is similar to borrowing money. If $40 million in bonds is issued, the estimated total cost over 20 years - with principal and interest - is $72 million, with an annual payoff estimated at $3.6 million. Should there be funds available after museum obligations have been met, the County Board - with input from the public - will determine if or how those proceeds shall be spent.
If you know you only need $3.6 million annually, why are you increasing the sales tax to raise $4.15 million annually?
State law requires us to raise the sales tax rate by increments of 1/4 of one percent. We cannot ask for a lower increase, such as 1/8 of one percent.
We're in a recession and people may not be spending as much as they have in the past. What happens if you cannot raise $3.6 million annually to make your "loan" payment?
Only money collected from the sales tax increase can be used to pay the bonds off each year. If the annual payment cannot be met with the sales tax collection, the bond holders bear the burden, not Peoria County or the tax payers.
Why would anyone take the risk to invest in bonds that may not be paid off annually?
As with all investments, the higher the risk, the greater the return. A diverse risk portfolio is a prudent investment strategy, and Revenue Bonds represent a component of that strategy.
Once Peoria County has invested $40 million in the museum, will you be operating the museum?
The $40 million will be used to complete construction of the museum; it will not be used for operating costs. Peoria County will own the museum building until the bonds are paid off in twenty years. Peoria County will not have a role in operating the museum, nor will the County own any contents of the museum.