Hampshire board approves 1% non-home-rule sales tax to fund Public Works garage

The Hampshire Village Board voted to adopt a 1% non-home-rule municipal retailers' occupation tax on Aug. 20, approving the levy to generate revenue for a new Public Works garage and related debt service.

Staff member Miss Lions told trustees the tax is expected to supply roughly 70% of the revenue for the new garage and for debt service tied to that project. “This will fund the Public Works garage and the debt service required for that,” she said, and noted that the Illinois Department of Revenue would collect the tax and remit it to the village.

Lions and staff described how the tax is commonly used by neighboring communities and said a significant share of the burden will fall on non-resident customers. “It’s usually paid by non-residents and especially here where we have all the truck stops,” Lions said, arguing that many purchases at restaurants and truck stops are made by people who do not live in Hampshire.

Board members debated whether the ordinance should include a strict legal limitation tying revenue only to construction of municipal buildings. One trustee asked whether the ordinance could be drafted so all revenue “would only be used in the construction of municipal new municipal buildings such as the Public Works building, the administrative building or the police building.” Staff and the village attorney explained that the statute permits expenditures for public infrastructure or property tax relief and that the board can further constrain the use of proceeds during the annual budget and appropriation process.

Trustees were advised that titled and registered vehicles sold by a state agency and governmental entities are exempt under the ordinance language; staff explained the exemption applies to property titled to a state agency. The board also heard that the grocery tax previously imposed on food sales at local grocers will be eliminated statewide beginning Jan. 26 under recent state action, and that Hampshire stands to lose some grocery-tax revenue if not reimposed locally.

After discussion and questions of staff and legal counsel, a motion to approve the ordinance as presented was made and seconded. The roll-call vote passed, recorded in the minutes as 5–1 in favor.

Next steps: officials said the Illinois Department of Revenue will administer collection if the ordinance is implemented and the village will address appropriation and any internal restrictions on how proceeds are allocated during the budget process. The board and staff signaled an intent to prioritize the Public Works garage in operating budgets while noting that future boards could change allocations unless specific limits are added to the ordinance or the budget.