With an upgraded bond credit rating and sales tax revenue from an Amazon fulfillment center, Matteson’s economic future is on an “upward trajectory,” according to the village’s mayor.
“The village has experienced tremendous economic growth,” said Mayor Sheila Chalmers-Currin.
The improved credit rating “shows to prospective business partners that the village has financial strength,” she said.
Village voters last summer also provided Matteson with the ability to levy a 1% home-rule sales tax, and the village projects increased sales tax revenue in the coming budget year.
That is due in no small part to an Amazon fulfillment center that opened in fall 2021 southeast of Harlem Avenue and Vollmer Road, directly east of Lincoln-Way North High School.
Some goods delivered from Amazon distribution points, such as fulfillment centers, to in-state customers are taxed at the rate where the distribution center is located, while others are sourced at their shipping destination (customer’s doorstep), depending on who the seller is, according to the Illinois Department of Revenue.
For marketplace sellers who sell their own wares through Amazon for products delivered from Illinois locations to in-state customers, taxes would be assessed at the rate where the customer lives, according to the department.
Regarding the improved credit rating, a Feb. 28 report by Standard & Poor’s assigns an AA-/stable rating to the village, which just a few years ago had a B1 rating, Chalmers-Currin said.
Standard & Poor’s noted Matteson ran a deficit before fiscal 2020, in the village’s general fund, from where most village operations are paid. The village has since aligned expenses and revenues to show operating surpluses, the ratings firm said.
The stable outlook in the company’s credit rating reflects expectations that the village “will likely maintain positive operations and continue to improve available fund balance during the next few fiscal years while sustaining very strong liquidity,” according to the report.
Standard & Poor’s notes the village’s “improving economic profile,” including the Amazon facility and the new revenue generated by the home-rule sales tax.
The better rating would benefit the village in the event of a bond sale, with the village able to obtain a lower interest rate.
More Top Picks How We Test
No bond sale is planned, but it puts the village in a better position if that is needed, Chalmers-Currin said.
Matteson could also get a more favorable interest rate, with the upgraded credit position, if officials decide to finance any existing bond debt, but “we don’t have anything imminent we plan on doing,” said Rasheed Jones, the village’s finance director.
Last year’s referendum was the second time Matteson tried to achieve home-rule status, with the first referendum rejected by voters in 2014.
Home-rule authority gives a community options to impose new taxes, such as a sales tax or a transfer tax on property sales.
Illinois communities with a population of at least 25,000 automatically receive home-rule authority, and some below that population have gone to voters to win home-rule powers. Matteson’s population is 19,374, according to the 2020 census, compared with just under 18,300 in 2010.
Communities that are not home rule can also establish a sales tax, but at a rate less than home-rule communities, but Matteson did not have a nonhome-rule sales tax.
The village’s home-rule sales tax took effect Jan. 1. The village also did away with a 1% tax on food and beverages purchased at restaurants and other locations that have dine-in facilities.
The Village Board agreed to put a lid on the village’s tax levy, with no increases for five years.
Matteson’s new budget year starts May 1, and sales tax revenue are estimated to be $11 million, including $3 million from the home-rule sales tax, according Jones.
For the budget year that will end April 30, Jones estimates sales tax revenue to be about $8 million.
Chalmers-Currin said her administration isn’t projecting what sort of sales tax revenue Matteson might see from Amazon, but points to the financial rewards experienced in Monee, where an Amazon fulfillment center opened in August 2017.
“We are hoping we get to that point,” she said.
Monee, with a population of a bit more than 5,100, estimates sales tax revenue of $13.2 million for this budget year. That includes $6 million from its home-rule sales tax.
By contrast, Orland Park, with a population of nearly 59,000 and large commercial retail base, sees about $30 million a year in sales tax revenue.
Amazon has also opened fulfillment centers in Markham and University Park.