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The Hammond City Council on Monday approved a one percent food and beverage tax to be used to expand the Hammond Sportsplex and build a train station in the downtown South Shore.

The Indiana General Assembly passed a bill this year that would allow Hammond to impose a 1% tax on prepared foods and beverages, Hammond Mayor Tom McDermott said. The tax would be in addition to the state’s 7% sales tax, he said.

Gov. Eric Holcomb signed the bill into law, putting the tax into effect on July 1, McDermott said. But after final council approval, it will take another 120 days for the Indiana Department of Revenue to prepare for the tax.

The city can use the tax for 20 years and it cannot be increased by more than 1%, McDermott said. The tax will not be added to the grocery bill, McDermott said.

The state has mandated that funds raised by the tax can be used for three projects: expanding the Hammond Sportsplex, building a train station in downtown South Shore on the West Lake Corridor and expanding the Pavilion at Wolf Lake, McDermott said.

The tax is estimated to raise $2 million annually for 20 years, McDermott said. Given the cost, the city will only provide money for the sports center and the train station, McDermott said.

Each project is expected to cost more than $10 million, he said, not including financing costs.

“We’re pretty sure there won’t be much money left to expand the pavilion. I think that’s a great idea. But I think that’s a much bigger discussion. We’re not going to be able to fund that in Hammond on our own,” McDermott said.

Before the vote, City Councilman Dave Woerpel emphasized that under state law, the tax cannot be increased by more than 1%, expires after 20 years, can only be spent in three areas and does not apply to groceries.

The council voted 9-0 on the first and second readings of the ordinance. The council also scheduled a public hearing on the ordinance for June 24 at 5:00 p.m. at Hammond City Hall, 5925 Calumet Avenue.

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