Champaign City Council Grants Liquor Tax Preliminary Approval

Members of the Champaign City Council expect further discussion in the coming weeks on a proposed four percent tax on packaged liquor.

The suggestion has been raised as a way to avoid cutting three jobs at the city's police station, and closing the front desk during overnight hours. City Finance Director Richard Schnuer said the tax would raise about $700,000 a year. Council members tentatively backed the tax on a six-to-three vote in Tuesday night's study session. But one opposed to the idea, Deb Frank Feinen, said those favoring the tax haven't gauged the full impact on the local economy.

"We have local small business owners who have package liquor stores or sell alcohol," she said. "And I want to be very careful and cautious before imposing a tax that may impact their business because it's more important ultimately that we keep those businesses running."

Feinen said the tax could also change spending habits at liquor stores, or drive people to neighboring communities to purchase liquor. Council member Karen Foster brushes off those suggestions. She proposed the tax in last week's meeting. Foster said local bars and restaurants that serve alcohol are already subject to a food and beverage tax, and this would level the playing field.

"Any liquor drink is taxed already," she said. "And I've heard from campus bar owners and they feel that this is a fair tax to have the package liquor stores also have a tax."

Feinen suggests the city look at hiking the local hotel-motel tax, or consider making cuts elsewhere. But she said the council should also have a broader discussion about the police department, and consider a portion of the cuts there.

It's unclear when the council will conduct a final vote on the proposal, but a final budget approval is expected on June 21st.