City finance director: new 1% sales tax could fund roughly $2 million in annual road projects

South Beloit—s finance staff told the council on July 20 that preliminary distributions of a newly enacted 1% sales tax have yielded $502,000 through July and that, when annualized and combined with motor fuel tax receipts, the city could direct roughly $2 million annually toward road projects. Finance staff said the $502,000 figure represents distributions received from April through July and that, annualized, the revenue could approach $1.1 million to $1.2 million for a full 12 months. When combined with state motor fuel tax receipts (MFT) the staff estimated roughly $2 million in annual road funding could be available. The finance director cautioned council that some revenue categories have shifted year to year: sales tax receipts are about $170,000 higher year to date than the same period last year, while use tax receipts are about $90,000 lower. The director said those allocations are decided by the state and sometimes reclassify use tax into sales tax distributions. Staff also reported the city—s general fund year‑to‑date position through June showed a $1.47 million surplus compared with $1.19 million a year earlier, driven by higher revenues and lower expenses in part because of timing differences in cannabis rebate payments. The council received investment and cash‑flow notes, including that maturing certificates of deposit are earning less interest than a year ago and interest income is expected to be lower next fiscal year if rates remain reduced.