The above map shows the boundaries of the proposed Dupo business district. (submitted photo)

Dupo is one step closer to creating a business district after the village board officially heard a proposal at its regular meeting.

The business district has been in the works since the board began discussing it in the spring.

“We started discussing it as a potential revenue generator and a potential way to cure some ails in the village,” said Keith Moran, who serves as economic development consultant for Dupo.

Moran said a business district is straightforward in both its operation and benefits.

“It’s a newer economic development tool that allows even non-home rural communities to bump up their sales tax by up to 1 percent to help with redevelopment efforts within that general area,” Moran explained.

In Dupo’s case, the current sales tax is 7.35 percent. So, if someone buys a product in Dupo that costs $100, after tax it will be $107.35.

Those tax dollars go to the Illinois Department of Revenue, which redistributes them to a variety of places.

The state gets $5, Dupo gets $1 for its general fund, St. Clair County gets 25 cents and the rest of the money goes to other local tax districts like one for county flood prevention.

If the business district is put in place, the tax goes up to 8.35 percent. The allotment of money stays the same, but now Dupo would get an extra $1 for its business district fund.

That money then goes toward improvements in the business district.

“What’s nice about it is what gets generated in that area gets spent in that area as well,” said Moran. “It’s not just some tax that can go blindly into all areas. It’s meant and intended to make improvements in the Dupo business district area.”

The proposed business district encompasses 358 parcels of property and rights-of-way in the village. Generally, it includes properties along Main Street and extends to I-255 on the northern and southern ends.

The total cost of the district is almost $8 million, with much of that cost coming from expenses associated with renovation and construction within the business district. 

Moran said the Dupo business district would have a number of benefits. 

Even with the 1 percent tax hike, the tax rate would still be lower than surrounding areas. Moran said Belleville has a 9.1 percent sales tax and parts of Columbia and Waterloo can go as high as 8.5 percent.

“It still keeps our sales tax rate well below where most folks are going to shop anyway,” he said. “That’s why it was viewed as a strategy to boost some revenues and get some stuff done.” 

Additionally, the tax does not affect items licensed to the state like vehicles, medical items like prescription drugs or food. 

“That’s kind of a nice thing about it,” Moran said. “It’s not going to hit our fixed income folks or folks that sell products where 1 percent impacts them.”

It also will not impact property taxes, unlike a tax increment financing district, which the town also has.

Most importantly, money from the business district could help improve the town in several ways. 

“We can improve the Main Street area when this comes through,” Dupo Mayor Jerry Wilson said. “We can also do improvements on internal parts of the town. It will help out with public safety. Those are the areas we’re focused on.”

Additionally, funds can be used for beautification, street repairs, infrastructure work and demolition and rehabilitation of buildings.

“The idea is really to start making bigger efforts to improve downtown Dupo,” Moran summarized. “We’re really looking to make a bigger push to more folks into downtown Dupo and carry forward some of the beautification type things that have gone on.”

The village will host a public hearing for the business district on Aug. 20 at 6:30 p.m. at Dupo Village Hall. If that meeting goes well, the business district will be adopted in September.

The tax will then go into effect in January. 

This project is separate from a proposed I-255 interchange at Imbs Station Road that has been in the works for several years. That project is still progressing slowly, Moran said.