DANVILLE -- The city council voted Tuesday to implement a grocery tax beginning in 2026 while postponing a vote on a proposed increase in its gas tax.
The council voted 10-4 to approve a grocery tax to replace the 1 percent sales tax on groceries that the state has said it will no longer collect on municipalities' behalf as of Jan. 1, 2026. Aldermen Tricia Teague, Jon Cooper, Ed Butler and Bob Iverson voted against the tax, which will be eliminated if the state reimposes its grocery tax.
Without the new tax, the city would lose about $750,000 a year, city officials have said.
"It's the same tax that everybody's already paying; it's just we would collect it instead of the state," city Comptroller Alyssa Sweeten said.
The current state tax on groceries is 1 percent, meaning for every $100 spent, $1 is collected and sent to the city, Mayor Rickey Williams Jr. said.
Williams said he understands that aldermen are concerned about the effect the tax will have, especially on the 25 percent of families at or below the poverty line in the city, but he said the lost revenue would create a bigger problem. He added that the grocery tax is more "fair and equitable" than other taxes.
Williams and Sweeten both said the city shouldn't dip into its $1.2 million in reserves to make up the revenue from the loss of the state grocery tax, because that fund is still well short of its goal of $9 million to cover three months of operating expenses in case of a state shutdown or if the federal government freezes funds.
The council also delayed a voted on an increase in the local motor-fuel tax until Dec. 17. The proposal would see the rate increase from the current 10.7 cents per gallon to 13 cents per gallon in January and just under 20 cents a gallon on July 1, 2026.
The proposed increases are the result of findings by Azavar, a consultant the city hired to analyze its revenue streams. It found that for about the past 16 years, the city was not properly calculating its gas tax, applying an annual 2 percent increase on only one of two parts of the tax.
Williams said the increase, which is meant to correct the issue, will impact residents, but the city is hoping to provide some relief when it issues its next property-tax levy.
Sweeten said the city owes Azavar a "settlement payment," or what Ward 6 Alderman Jon Cooper called a "finder's fee," of $1.35 million for its work in locating the discrepancy, and therefore wouldn't see any additional revenue off the tax increase until March 2026.
Williams said the change would bring the city another about $600,000 between now and 2027.
Under the proposal, the local gas-tax rate would increase to 13 cents a gallon on Jan. 1 and 16 cents a gallon on July 1, then move to 19.9 cents a gallon on July 1, 2026.
Teague said the city is raising taxes so much that more people won't be buying gas in Danville unless they have to.
"This is a senior town," Cooper said. "People are living on Social Security. It's pretty tough to swallow all of this stuff."
Williams has told aldermen if they want to start over with the motor-fuel tax, they'd have to repeal the existing ordinance and pass a new one. Many wanted more time to fully understand what had been implemented and decide how the city should move forward.
Votes on the city's tax levy and new $70 million budget were also postponed to Dec. 17.
In other business:
During public comment at the start of the meeting, Cindy Nacco, wife of outgoing Danville Area Community College President Stephen Nacco, who's had a dispute with Williams over funding for a program that would bring undocumented immigrants to the city, asked for a full investigation into Williams' "abuse of power," hiring and firing practices and vindictive behaviors involving people working with the city. She said the council should seek the help of the state attorney general with the investigation.
Nacco said Williams has also complained to officials with the Danville Symphony Orchestra, with which all three are involved, that she and her husband should no longer be allowed to volunteer at an event it is hosting this weekend, as he would feel uncomfortable.
Williams replied that one of his relatives would say, "The truth is the light of the world," and he stands by that.
The council approved a $2.08 million contract with Homrich Wrecking Inc. of Carleton, Mich., for the demolition of Bresee Tower and the former Vermilion County Courthouse Annex. It received 12 bids that ranged from $1.36 million to $4.9 million.The council also approved raising the maximum age for police-officer applicants from the current 35, which is set by the state, to 40 to try to expand the pool of eligible applicants. Applicants must now be between 21 and 40 years old at the start of training.