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Sales tax increase to spur development in Mount Zion approved

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Del's Popcorn Shop in Mount Zion

Penny Skidmore prepares a Halloween-themed gift basket for a customer Tuesday at Del's Popcorn Shop in Mount Zion. Starting Jan. 1, the sales tax on items like this sold in the new business development district will increase by 1%.

MOUNT ZION — A planned development, worth more than $4 million, is expected to be among the beneficiaries of a new business development district approved by the Mount Zion Village Board this week.

The linchpin of the new economic development tool is a 1% increase in the sales tax, a 1% service occupation tax and a 1% hotel tax on businesses operating in the district, which includes land on both sides of Illinois 121 and Main Street in the village.


The Mount Zion business development district includes land on both sides of Illinois 121 and main Street in the village.

“It’s that tool in the toolbox to be competitive when we are looking for economic development opportunities,” Village Administrator Julie Miller said. “We still have to have these options available for Mount Zion in order to make us more attractive for development. Anything other than residential, developers expect some type of incentive.”

The money generated by the new taxes, which will start being collected Jan. 1, will be placed in a fund that can be used to assist developers with plans and studies, land acquisition, site preparation, public infrastructure, renovating existing buildings, constructing new buildings and helping to reduce financing costs.

Miller anticipates the new taxes will generate in the ballpark of $400,000 per year at the outset, which should increase as more development comes on board and adds to sales tax base. That, in turn, will help the schools, who are collecting a 1% sales tax to assist with improvements, she said.

Miller noted during the meeting that the sales tax increase would put Mount Zion at the same level as Forsyth at 8.75%, and below the 9.25% sales tax and the additional 2% food and beverage tax payable on purchases in Decatur.

The business development district boundaries are the same as those for the proposed tax increment financing district, which the village board is expected to approve in January. Both districts have a shelf life of 23 years.

The new TIF will coincide with the expiration of a TIF created more than 30 years ago, which saw the equalized assessed valuation of that area increase from $900,000 to $6 million. That means taxing bodies will see a boost in their property tax receipts ahead of the new TIF being enacted.

Miller said the business development district money also can be used by the village for road improvements. She added the village is prohibited from enacting a gas tax, similar to what Decatur has done, to help in that area.

Miller said the village board, with assistance from the Bloomington-based Economic Development Group, will have final say on the distribution of the business development district funds.

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One of the goals of the business development and TIF districts is to address areas where development is hampered by such things as proper street layout, deteriorating structures and poor platting, among other blight conditions

While the document presented to the village board included a long list of projects for which proposals from developers would be entertained, there is one project already on the books.

The village has a preliminary agreement in place and plans to enter into a redevelopment agreement with Steve and Cindy Lewis to build a mixed-use commercial and residential development on vacant land behind businesses along Illinois 121 from the property line with Neal Tire and Auto Service to West Woodland Lane. The development area also includes a home at 1505 N. State Route 121.

There were no comments during the public hearing held prior to the vote on Monday.

While Mike Jacobs, owner of Del’s Popcorn Shop, said Tuesday he was unaware the additional taxes were being considered, he was supportive of the move based on its intended use.

He made note of the village having a lesser sales tax burden than that on his counterparts in Decatur and that improving the local business climate should help everyone.

The village board unanimously adopted the resolution creating the business development district and the associated taxes.

Photos of Mount Zion people  and places from our archives


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