Town Manager On Sales Tax Sharing: 'Both Communities Benefit' | WGLT

Town Manager On Sales Tax Sharing: 'Both Communities Benefit'

Jun 1, 2016

Division Streets marks the border between Bloomington and Normal in some parts of the community.
Credit Ralph Weisheit

An ad-hoc committee of elected officials from the Town of Normal and the City of Bloomington is still working on developing a sales tax sharing agreement.

Speaking on GLT's Sound Ideas, Normal City Manager Mark Peterson told Mike McCurdy he's unclear when town staff might get the proposal to work out the details. Peterson said the split would be based on population, which amounts to about a 60-40 split.

"What it's trying to do is guard against competition between the two cities for sales tax. It's going to guard against poaching businesses, not to say that's gone on, but it certainly can happen," said Peterson. "It will hopefully prevent either city givingĀ  large financial incentives to large sales tax producers, which I think at the end of the day isn't good public policy.

The concept has been endorsed by the Bloomington-Normal Economic Development Council, The McLean County Chamber of Commerce and B-N Advantage.

Peterson said Kroger moving from its College Avenue location in Normal to a location along College Avenue a few blocks to the east in Bloomington precipitated the conversation among town council members and Bloomington aldermen.

"The council members had a conversation about how do we address in the future, how do we make sure that our efforts to expand our sales tax base doesn't adversely affect the other community," said Peterson. "We both benefit from retails sales because we know that our residents shop in Bloomington and their residents shop in Normal."

Mark Peterson, during a Normal Town Council meeting.
Credit Ralph Weisheit

Peterson said he thinks Bloomington-Normal would be the first community to strike sales tax sharing deal encompassing all of two communities. There are instances of sales tax zones, including the so called metro zone developed in January of 1986, including the former Mitsubishi manufacturing area and retail areas, including Farm & Fleet and Walmart. According to Bloomington budget document from that year, "this promoted development in the area without the worry of the two municipalities competing against each other when attracting businesses."