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Editorial: Geneva right to back off dining tax

Leaders often fear changing course will make them appear indecisive, but sometimes it's the right thing to do.

We think that's the case for the city of Geneva, where the city council on April 17 reversed itself and rescinded a 2 percent tax on restaurant meals before it was to take effect on May 1. We applaud that decision for several reasons.

Geneva, like municipalities all over Illinois, is scrambling to raise money to cope with delays in funding from the state and other challenges. But local leaders weren't persuasive enough about the need for more funds during the long run-up to approving the tax last October.

City administrators pointed out they're making do without filling some jobs and suggested the tax as a way to pay for road improvements and new equipment. But the argument for the tax came into question during political campaigns leading up to the April 4 local election. Alderman Tom Simonian, who leaves office next week after an unsuccessful run for mayor, pointed out Geneva's balanced budget and 25 percent reserves in leading the charge for rescinding the tax.

Aldermen displayed their lack of confidence in local support when they opted for the tax on restaurant meals in the first place.

An alternative, raising the city's sales tax, would have required a referendum. Aldermen quickly put that option aside, especially after the Geneva Public Library put a tax-increase question on the April ballot.

But a tax on restaurant meals didn't sit well with the business owners. Many that protested are located downtown, in the type of neighborhood cherished by most suburbs that have one and coveted by those that don't.

Restaurant owners said the tax, which would add 40 cents to a $20 tab, would hurt them competitively and that they should have gotten a heads-up about the proposal.

Now what?

In our experience, tax increase proposals don't stay down for long. If leaders in Geneva bring up the idea again, they have some work to do to get buy-in.

We prefer voters make the call, either in a binding vote on a sales tax increase or in a nonbinding vote on other types of taxes. The onus would be on the council to present a compelling case, which admittedly could be made more difficult by the tax increase just won by the library.

Proponents of a restaurant tax say it's attractive because three-quarters of diners are from out of town. If city officials decide to go down that road again, they need a plan that helps restaurants boost their appeal to customers in other ways.

It's back to the drawing board, and we think that's a good thing. Congratulations to the council for coming to that realization.

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