A tax increase proposal floated in late October by John Stroger, president of the Cook County, Illinois, Board of Commissioners, attracted the ire of the Chicago business community and suspicion from the county commissioners who serve under him.
In a $3 billion annual budget, Stroger predicts a $100 million shortfall for fiscal year 2004, which began December 1. To plug the gap, Stroger called for increasing the county sales tax from .75 percent to 1.0 percent. The rate has been at .75 percent since 1991.
The increase would give Chicago, the county seat, a sales tax rate of 9.0 percent. Only two other cities in the nation–Nashville and New Orleans–have sales taxes that high.
“Difficult times require difficult decisions,” said Stroger.
Stroger boasted his 2004 budget proposal holds the line on property taxes for the fifth consecutive year. He predicted the sales tax increase, when fully implemented, would net about $70 million for the county; a proposed 4 percent lease tax on automobiles and computer equipment would yield about $58 million, nearly enough to close the projected 2004 budget gap.
Public hearings on the Stroger proposal were held in November. Final approval of the 2004 budget was expected in late November, after this newspaper went to press.
Gerald Roper, CEO of the Chicagoland Chamber of Commerce, warned Stroger’s tax increases would have negative consequences for the area’s business climate. “This is a massive advertising campaign for Indiana and Wisconsin,” Roper said. “All he could do is possibly push companies, push consumers, push visitors out of this area.”
The Illinois Retail Merchant’s Association (IRMA) also reacted against the plan. Noted IRMA President David Vite, “Without a healthy retail sector in Illinois that encourages continued investment in personnel, advertising, buildings, and merchandise, sales tax revenue would not continue to rise and state and local government budgets would be severely and negatively impacted.”
The business community has allies on the county board.
“Cook County government has raised taxes on people in this county by $500 million in the last decade,” said Commissioner Forrest Claypool (D-Chicago).
“That’s not a way to run a business,” said suburban commissioner Carl Hansen, a Republican from Mt. Prospect. He noted several other suburban commissioners have shared with him their doubts about Stroger’s proposal. That opposition, Hansen said, “is kind of refreshing, since I’ve been the only one voting ‘no’ on [similar tax increases] all these years.”
Cut Spending Instead?
Commissioner Michael Quigley, another Chicago Democrat, offered a plan to cut spending by up to $50 million by consolidating county offices that offer duplicative services and shifting many of the county sheriff’s responsibilities to individual suburbs.
“No one likes to lose their power and prestige and so forth,” acknowledged Quigley, “but every hundred years, a city and a county ought to win a world series, and they ought to restructure their government to bring it in line with reality of the modern world.”
Suburban Commissioner Larry Seffredin, a Democrat from Evanston, will vote no on Stroger’s proposal. “Now more than ever,” Seffredin said, “the County must tighten its belt at all levels and look for innovative ways to maintain and improve services. I vehemently oppose the two tax increases … proposed by President Stroger.”
Stroger says he is already cutting so many jobs and so much waste there is nowhere else to turn without decimating the health, law enforcement, and criminal justice services county residents expect and demand.
Claypool disagreed. “The Cook County government is legendary for its waste and bloat,” he said. “It’s a place where every politician’s relative can find a home, and more taxes is not the answer. The answer is to cut spending.”
John Skorburg is managing editor of Budget & Tax News. His email address is [email protected].