Springfield dine-in tax would be latest fee for Illinois restaurants

A potential 2 percent dine-in tax imposed on Springfield restaurants has yet to be introduced, but the idea - which other towns have tried - is not a welcome one.

Mike Monseur entered the restaurant business in part because he wanted to leave the world of Illinois politics.

Monseur left a job as an Illinois Department of Transportation spokesman more than a decade ago to open and operate restaurants in central Illinois. Providing a service to downstate communities and creating opportunities for job seekers was more appealing than the dysfunctional world of Illinois politics and misguided policy.

But, as he and other business owners have learned, it’s difficult to escape Illinois politicians’ harmful decision making.

“Illinois is not an inviting state,” said Monseur, who co-owns several Godfather’s Pizza locations. “It’s not a state where it’s affordable to work and live.”

“I just wish Illinois and our communities wouldn’t be so anti-business.”

The latest hurdle for restaurant owners like him and others: A potential 2 percent dine-in tax in the city of Springfield, aimed to shore up the city’s $11 million budget shortfall.

Monseur, along with the Greater Springfield Chamber of Commerce and the Illinois Restaurant Association, helped organize restaurant owners to show up at a Springfield City Council meeting Jan. 18 to oppose the dine-in tax, which effectively acts as an increase to the sales tax at city restaurants. According to The State Journal-Register, the tax would affect 400 Springfield businesses and raise about $5 million annually.

No City Council member officially proposed a dine-in tax ordinance at the meeting, but Monseur doesn’t think the issue will go away, given its history.

A dine-in tax in Springfield was originally brought up in City Council in 2011, but the measure – at that time proposed as 1.5 percent – did not come to fruition. However, other municipalities have taken similar approaches. Downers Grove, Geneva and Skokie have all added new dining taxes in the last few years, while Decatur has had the 2 percent tax since 2002.

For restaurateurs, it’s a point of frustration that makes their businesses less competitive with neighboring towns.

“We combined the [dining tax] and the sales tax, so it’s 12.25 percent,” said Randy Miles, owner of the Village Inn Pizzeria in Skokie. “I do put a disclaimer on there to explain why it’s 12.25 percent. I put my protest on there.”

Monseur saw firsthand how the local dining tax can hurt a business. Monseur had a location just inside the Decatur city limits that had to compete with similar restaurants in neighboring Mt. Zion, which did not have Decatur’s 2 percent tax. The result: Customers opted to go just down the street to Mt. Zion, and his Decatur location eventually closed.

Customers’ decision to choose cheaper options was no surprise to Monseur.

“When people go out shopping, they look for the best deal,” he said. “I don’t understand why our leaders don’t understand that. Why they don’t look outside the box and think ‘what are the long term effects?’”

Springfield could see people head for neighboring towns, too, if it were to enact the dine-in tax. And in the state with one of the highest overall tax burdens in the country, Springfield is already feeling the effects of negative migration.

The Springfield metro area and Sangamon County as a whole are shrinking in population, with more than 1,200 people on net leaving the Springfield metro area from July 2015 to July 2016. Sangamon County lost 1,299 people on net to domestic migration in that timeframe, meaning more than 90 percent of the county’s losses were from its largest city and county seat, Springfield.

Springfield’s jobs climate is seeing a similar trajectory as its population, with the metro area losing 800 jobs in 2017. Making the city more expensive isn’t the change it needs.

“You can only cut back on products and different things so much until you start affecting people … and I’m thinking how am I going to keep the lights on today so [my employees] can have a tomorrow. It’s not about me living high on the hog because certainly in this industry we’re not,” Monseur said.

“I look at our elected officials who have been here for years and years and years and what they’ve done has been broken. They’ve gotten so comfortable with knowing they’ll get hired over and over again, that they don’t care about the little guy. And the little guy is getting crushed.”