The Ottawa City Council canceled its scheduled public hearing on the proposed Business Development District.

The hearing was set to take place at Tuesday night’s council meeting, but was scrapped beforehand and is not expected to be considered for the foreseeable future.

The proposal dealt with a possible increase in sales tax to help the city fund municipal projects like new fire stations for the Ottawa Fire Department and a waterfront amphitheater along the Illinois River.

“I would like to thank the mayor for taking the business development district off the agenda,” Commissioner of Accounts and Finance Wayne Eichelkraut Jr. said. “I am still of the opinion that raising the taxes would not have been good.”

Eichelkraut voiced his opposition to the proposed Business Development District at the Council’s Feb 17 meeting.

Hasty explained that the sales tax increase proposal was not in a vacuum, but geared towards recouping funds lost by a 2024 grocery tax repeal by the state.

“In August of 2024, the Governor repealed the 1% grocery tax that had gone 100% back to the communities where groceries were purchased,” Hasty wrote in a statement. “At the same time, municipalities were given the options of reinstating the 1% grocery tax, adopting a one-time 1% retail sales tax, or implementing both. Most communities in Illinois, including many around Ottawa, chose to put the grocery tax back in place. Ottawa did not. Instead, we adopted a 1% retail sales tax only.”

Hasty defended the retail sales tax at the time.

“We felt that if it was possible to avoid taxing something as essential as food, it was the right thing to do,” he said.

In his statement, Hasty continued, “After passing the 1% retail sales tax, we were notified by the State that, due to our non-home rule status and related limitations, Ottawa was only eligible for a 0.5% increase. With that information and remaining firm in our decision not to tax groceries, we began exploring alternative revenue options. One of those options is a Business Development District.”

Hasty said the proposed district would stretch from Route 23 in the north to South Town Mall in the south, and from the car dealerships in the east to Simcoe in the west.

Hasty said that there was confusion regarding the city’s increase in the sales tax as stipulated by state provisions.

“We were under the understanding that we could move forward with it, that this was an isolated event coordinated with the removal of the grocery tax by the state, and then we had information that countered that, so it was basically different ways of interpreting the law,” he said.

Hasty said that similar state provisions prevented the city from using revenue earned from the sales tax increase on certain aspects of the public projects being discussed.

Hasty said that the city of Ottawa is entertaining upwards of nine different avenues of alternative financing for developing projects and providing relief for residents.

“One thing I would like to reiterate is the business development district is one idea that would have allowed for a beginning to some property tax relief, but it would have also served to free up funds for other projects as well,” he said. “That doesn’t mean that we’re slowing down on any of those projects. We’ll continue to look for different ways of funding them. We’ll continue to plan for them and hopefully be able to continue to grow our city.”