Tourists and locals alike will see a tax increase as part of a plan to remedy the city’s nearly $1 million budget deficit.

The Carbondale City Council voted to raise both the sales tax and hotel/motel tax as part of its plan to balance the budget.

The sales tax is set to increase by 0.25 percent and passed with a vote of 5-2 with Councilman Lance Jack and Councilwoman Corene McDaniel voting nay. The increase takes effect July 1 and has a sunset clause, or expiration date, of April 30, 2017.

City Manager Kevin Baity said the increase in revenue should yield around $1 million per year. However because of the late implementation date, it will only yield $867,000 for FY 2015.

The hotel/motel tax will increase by 1 percent and passed unanimously. It takes effect May 1 and is expected to raise an additional $75,000 annually.

However, the projection still falls short of the $977,000 deficit the city faces. The Council decided to leave several positions open to curb further expenditures, including one police officer, assistant to the city manager and neighborhood inspector coordinator.

With the tax increases and the spending cuts, Baity said he projects a small surplus of more than $40,000.

The Council said the fix is only temporary and the same problems could soon arise. Jack said he could foresee the Council becoming complacent with the increases and tried to amend the sales tax sunset clause to 2016 but it failed by a vote of 2-5 with only Jack and Councilwoman Jessica Bradshaw voting aye.

Acting Mayor Don Monty said he understood the reservations about raising taxes. He drew a parallel to the problems state is having and said cutting waste and fraud is simply a political answer.

“As I’ve heard discussion around the tax issues locally, there’s the same perception that somehow in the government you can miraculously find waste and fraud that will solve those problems,” he said. “But I can tell you from my time working with the budget, and we’re all in the middle of going through the budget next year, anyone who can find waste and fraud in that budget, please stand up and show us where it is.”

No one stood up.

“I think part of the problem is that everybody defines waste as a program that they don’t use, and therefore it doesn’t need to be in the budget,” he said. “Of course everybody in the public uses a variety of programs. We don’t use them all.”

Monty said if everybody only paid for the programs they used, there would be no consensus, and no solution.

Bradshaw said she hopes the city considers alternative revenue sources in the future, such as increasing fees. Councilwoman Jane Adams agreed and said she wanted to explore taxes such as a packaged liquor tax, food and beverage tax, plastic bottle tax and amusement tax.

Despite the seemingly dire news, the budget was hailed for at least one reason. The city was awarded with the Government Finance Officers Association Award for distinguished budget presentation for having an easily accessible and readable budget report for the public.

The Council also approved tax increment financing for Carbondale Flats LLC. Carbondale Flats intends to develop the space at 710 S. Illinois St. currently occupied by 710 Bookstore into a mixed-use retail and residential complex.

It is set to be five stories tall with the ground level reserved for retail space. Executive Director of Carbondale Main Street Meghan Cole said she expects the development to benefit the local economy.

“I think it is an economic generator, not just a physical development but an economic development we are truly lucky to have on the table,” she said. “And I truly think that it will help surrounding businesses and the business district in general.”

Monty said he was happy to finally see significant development in the downtown area after such an extended period of discussion.

“It has been talked for a long time that we need to do something about downtown,” he said. “And this represents the first new development project of any consequence in downtown that I can ever remember since I came to Carbondale in 1968.”