As pandemic continues, Yorkville sales tax revenues climb

City officials expect receipts to continue rise for time being

Yorkville City Hall

YORKVILLE – When the coronavirus struck in March of 2020 and retail store lockdowns ensued, municipalities assumed that their sales tax revenues were going to take a deep dive.

That didn’t happen. People found themselves sitting at home with government stimulus checks in hand and nothing much else to do.

So instead of dropping, sales tax receipts spiked upwards dramatically.

In Yorkville, which starts its fiscal year on May 1, the trend was particularly noticeable.

The 2020-2021 year that ended last April saw the city collect $3.6 million in local sales taxes, up 12% from the previous year’s $3.22 million, Finance Director Rob Frederickson said.

If anything, that trend seems only to be accelerating.

Since the start of this fiscal year, the city has received another $1.9 million in sales tax revenues, up from $1.4 million over a comparable period last year, Frederickson said.

“That’s a big deal,” Frederickson said.

Normally, the city expects to see 2 or 3% growth in sales tax revenues from year to year, the finance director said.

Right now, the city is on a path to see an increase of 15 or 20% in local sales tax receipts for this fiscal year, Frederickson said, which would translate into a one-year haul of slightly more than $4 million.

“It’s very unusual to get this level of increase,” Frederickson said. “It’s definitely not the norm. Logic would dictate that this will level off.”

For now, the increased revenues are providing the city with a cushion.

“We’re in a much better position to weather the storm when the storm comes,” Frederickson said.

Sales tax revenues are what finance professionals like Frederickson call “a lagging indicator,” because the receipts are reported from the state a couple of months after they have been paid by consumers.

But that’s not all. The city collected another $2.7 million in “non-home rule” sales tax revenues in the last fiscal year, more than it had expected.

When residents shop at their local Yorkville retail outlets, they are charged 8.25% on general merchandise sales.

The state of Illinois gets the lion’s share of 5%. Kendall County collects 1.25%. The city gets a 1% local share and another 1% non-home rule share.

For qualifying food and drug purchases the tax is 1%, all of which goes to the city in the non-home rule column.

Hotel and video gambling tax revenues, which represent a much smaller portion of the tax pie, declined during the first year of the pandemic. “We’re starting to see the revenue rebound,” Frederickson said.