Cook County President Gets Earful from Angry Citizens

Published September 1, 2008

Hundreds of residents of Cook County, Illinois gave County Board President Todd Stroger (D) an earful over a 1 percentage point sales tax increase that is forcing county shoppers to pay the highest sales tax burdens in the nation.

Groans and derisive laughter greeted comments by Stroger and his staff as they defended the tax increase at a meeting at a local college in Palatine in June. Applause greeted many people who spoke against the county’s tax-grabbing, high-spending ways.

The county’s tax increase took effect July 1 and followed a regional transportation sales tax hike that took effect April 1. The combined sales tax increases total about $1 billion a year for Cook County shoppers and those in five neighboring counties.

Tax Tops 10 Percent

Cook County and Chicago have by far the highest total sales tax burdens in the state. Many communities in Cook County now have a 10 percent sales tax, three percentage points more than businesses in many communities outside Cook County are required to charge.

In Chicago, the general retail sales tax is now 10.25 percent. In addition, a special tax district in downtown Chicago pushes the sales tax in that area to 11.25 percent. The tax burdens include state, county, municipal, and transportation authority sales taxes.

“All these border towns and major shopping areas near the Cook County border will be affected,” said Pete Gill, a spokesman for the Chicago-based Illinois Retail Merchants Association. “Once you hit that big round number, 10 percent, it gets a lot of attention. Now customers are thinking about the sales tax. It turns their eyes toward other venues to shop.”

Especially upsetting to many county residents and businesspeople, including state Sen. Matt Murphy (R-Palatine), is that the expected $426 million annual take from the county’s higher sales tax is nearly twice the amount that was needed to close a projected budget deficit.

Businesses Face Disadvantage

“I appreciated that he came out here and brought his whole leadership team, but at the end of the day Stroger is unwavering in raising our taxes and putting our businesses at a competitive disadvantage,” said Murphy, who attended the meeting and has introduced legislation that would allow seven Cook County townships to form their own county.

“The lack of understanding of basic economics blows my mind. I was at a town hall meeting last night, and people who live in northern Wheeling, just a few blocks from the Cook County line, were saying they’re all going to cross the line to do their shopping,” Murphy said. “You raise the tax rate and you get less money. This has been proven before.”

President Offers Little Sympathy

Stroger showed a videotape illustrating the services Cook County provides, and during his remarks he shrugged off criticisms. “People don’t trust politicians,” he said, adding, “That’s the way this job works.”

Stroger offered little sympathy to border towns and businesses, saying, “That’s part of being in a large government. There are going to be areas that are harder hit than others.”

Some of the loudest derisive laughter was aimed at Dr. Robert Simon, former interim chief of the Cook County Health Services Bureau, who said, “I think it’s absolutely stunning to see what is done with $3 billion,” referring to a county budget many government watchdogs say is bloated and wasteful.

Repeal Effort Begins

Meanwhile, a movement to repeal the tax increase is taking shape, led by Cook County Commissioner Tony Peraica (R), who voted against the tax. The tax increase was approved by the slimmest of margins, a 9-8 vote, with intense pro-tax hike lobbying from government employee unions and advocates for users of the county’s money-losing health system. Business and consumer groups opposed it.

Commissioner Mike Quigley, a Democrat who joined Peraica in opposing the sales tax hike, said county officials ought to worry about the working poor in addition to suburban shoppers who might cross county lines to avoid paying the record-high sales tax.

“Every study shows that the sales tax is the most regressive tax that government imposes, and it disproportionately hurts those working poor who have to buy that bushel basket of goods every week just to survive,” said Quigley during a panel discussion on Chicago Tonight, a public affairs program on a Chicago public television station.

“I think the impact will be muted,” Quigley said, “because we won’t necessarily hear from those people, but they will suffer, and there will be job loss.”

Steve Stanek ([email protected]) is a research fellow at The Heartland Institute and managing editor of Budget & Tax News.