Normal eliminates vehicle use tax; OKs $1M-plus in tech upgrades – WGLT

Normal residents buying vehicles after June no longer will have to pay a one-time “vehicle use” tax, after the town council voted unanimously Monday to eliminate it.

Town leaders said in a climate where the town is experiencing economic growth, this is a good opportunity to eliminate the ¾-of-a-percent fee. That’s been charged to Normal residents buying a titled vehicle — such as a car, motorcycle or boat — for about 30 years.

“We’re in very strong financial shape right now. Our sales tax, which is a much greater revenue source from the town, has been coming in very strong, as has our state income tax. We have a pretty good cushion, and we’re meeting all of our reserve and financial, targets,” said City Manager Pam Reece.

Also at Monday’s meeting, the council approved more than $1 million in technology contracts, spent about $375,000 on eight defibrillators, and brought back a facade improvement grant program.

With Monday’s vote, starting July 1, the use-tax cut becomes a thing of the past. For a person spending about $25,000 on a vehicle, they’d save about $187.

The vote also authorizes budget adjustments to absorb an expected $360,000 in lost tax revenue for fiscal 2023-24. That figure is projected to be closer to $500,000 in future budgets, according to council documents.

The idea to cut the tax first was floated by council member Karyn Smith in February. She said Monday, knowing the town’s annual budget now also has a new $750,000 contingency, makes her support the cut even more.

That contingency fund “allows us to make this elimination of this tax without really endangering other programs of the town,” said Smith.

The town can afford to make the move, in part, because of the doubling of collected sales tax revenue since 2015, she said. Back then, Normal was collecting about $10.5 million in local sales tax revenue. By last year, that figure was $20.3 million, she said.

Council member Scott Preston said the tax sometimes surprised residents, and was unwelcome. Town staff sometimes had to follow up and get the remittance if dealerships didn’t collect it at the time of sale.

Normal has overseen the tax collection for the tax in both Normal and Bloomington. It has applied to vehicles bought within 60 miles of the communities. The council voted Monday to continue overseeing that task for its neighbor until October, allowing officials there time to establish its own collection program.

Reece said Bloomington collects sales tax revenue for both communities, and distributes that; while Normal has handled the vehicle use tax.

It’s unclear what Bloomington intends to do with its vehicle-use tax, said Reece. But she noted because it’s a larger community, the tax represents a larger revenue stream for its budget.

Also at Monday’s meeting, the council OK’d more than $1 million dollars in technology contracts.

About 65% of that spending goes toward a new Scientel Solutions network infrastructure and management system. The roughly $644,000 purchase is wide ranging, covering network design, infrastructure, and 24/7 monitoring. A five-year plan of management services will cost the town about $70,000 annually.

“We have to make sure we’re staying on top of things, that we’re providing the best we can in terms of security for the operation, and minimizing risk of failure,” said Reece.

Vasu Gadhiraju, Normal technology director, has said the new infrastructure will improve the town’s internal operations, and thus, the reliability of digital services to the community.

Reece noted the town’s local area network — connecting town facilities — has understandably grown in the more than two decades since it launched. The updates are “basically to make sure our technology is in a position to support this very robust operation,” she said.

The remaining $400,000 of tech spending OK’d Monday covers storage infrastructure, and a five-year contract extension for CivicPlus website services.

Town staff say the updated Presidio storage area network installation should take about eight weeks.

The town also authorized spending about $375,000 to replace seven defibrillators for the Normal Fire Department, and to buy an additional one.

The medical devices, from Massachusetts-based Zoll Medical Corporation, are used in NFD emergency vehicles.

In other business, the council

• Voted to bring back the Moratz Facade Grants Program, once available to Uptown business owners from 2003-2008. Normal will budget $75,000 for next year, and allow a 50/50 grant process.