Washington is set to establish a new Business Development District (BDD) following the City Council’s unanimous approval on Monday. A new 0.25% sales tax will take effect on January 1 for eligible purchases within this district, which encompasses the city’s primary commercial areas along Washington Road—from Washington Plaza on the west end to Wilmor Road.
The increase raises the overall sales tax to 9.25%, but essential items such as food, drugs, and vehicles will be exempt from this new tax. The estimated annual revenue of $700,000 from this BDD sales tax will be allocated for infrastructure improvements and to attract new businesses. A portion of the funds will also support the redevelopment of Washington Plaza, alongside programs like facade and beautification grants for existing businesses.
Several council members expressed a desire to reduce either the property tax or home rule sales tax to mitigate the impact of the new BDD sales tax. City Administrator Jeff Fiegenschuh emphasized that reducing property tax would significantly benefit residents. Alderperson John Blundy pointed out that Tazewell County schools are proposing a 1% school facilities sales tax on the upcoming ballot, creating challenges for the BDD’s acceptance.
Alderperson Brandon Moss acknowledged the difficulties in raising taxes but highlighted the community’s concerns regarding vacant properties. Alderperson Mike McIntyre reminded the council that fostering new businesses will ultimately lead to increased sales tax revenue. Many neighboring communities already implement BDDs with sales tax rates higher than 0.25%, indicating a precedent in the region.
