Record Sales Tax Stands as Cook County Board Sustains Rollback Veto

Published August 1, 2009

Despite a 12-3 vote to reverse a sales tax hike imposed last year, the Cook County Board of Commissioners failed to overturn a veto by Board President Todd H. Stroger (D).

To overturn the veto, support from 14 of the board’s 17 members was needed. The vote to overturn was 11-4 with two voting “present.”

The one percentage point increase is expected to generate $400 million annually for the county. It more than doubles Cook County’s portion of the area’s total sales tax burden and gives Chicago the nation’s highest sales tax rate.

A few days later Stroger vetoed a measure that would have phased out the tax increase over time.

Merchants, Mayors Disappointed

The total sales tax rate in most of Chicago stands at 10.25 percent. The Cook County share is 1.75 percent. In one part of the city the sales tax hits 11.25 percent because of a special taxing district.

In neighboring Lake and Will Counties the sales tax rate is 7 percent, while in nearby DuPage County it is 7.25 percent.

David F. Vite, president of the Illinois Retail Merchants Association (IRMA), said the organization “is very disappointed that the veto was not overridden. The malaise that the tax increase has brought to citizens and retailers of Cook County continues. The highest sales tax rate in the nation is not a moniker that is befitting a county that includes the City of Big Shoulders.”

“I am [also] disappointed in the vote,” said Palatine Mayor Jim Schwantz, a former linebacker for the NFL’s Chicago Bears who recently was sworn into office in the Chicago suburb in Cook County. “We are all in a very challenging economic environment right now, and the county sales tax rate makes it even more difficult for any border community to compete. Businesses in our [north suburban] community will continue to operate at a disadvantage to those in neighboring Lake County.”

Tax Battle Continues

Three days after Stroger’s veto of the bid to eliminate the sales tax hike was sustained, the Cook County Board voted 10-7 for a phase-out of the one percentage point tax hike by 2011, but Stroger vetoed that measure too.

Stroger said in a press release, “County officials anticipated that departments would have been required to slash costs by more than 20 percent across the board to meet the terms of the full rollback.”

Stroger added, “I have always supported rolling back the sales tax as funds become available. That is what I committed to in 2007, and that is why I proposed rolling back the sales tax increase by 25 percent last month [April 2009]. That’s why I am committed to future rollbacks as funds become available. I stand on those positions.”

‘Government Run for Insiders’

Several board members see Stroger’s stance as a purely political maneuver.

Commissioner Forrest Claypool (D) voted to repeal the tax completely, telling reporters immediately after the Stroger veto, “This is a choice between a well-managed government and a government that frankly is run for the benefit of political insiders.”

Republican board member Peter Silvestri, who also voted to repeal, said, “I think this is a central issue in the [next] campaign. It is a very unpopular tax.”

Schwantz offered the taxpayers a ray of hope: “I am hopeful that [a] phased repeal will be successful as any form of relief is better than the situation we have today.”

The next opportunity for taxpayers to attack the tax hike could be the February 2010 local elections. Chicago Alderman Toni Preckwinkle (D) has vowed to challenge Stroger for the county board’s top position.

John Skorburg ([email protected]) is associate editor of Budget & Tax News and a policy advisor to The Heartland Institute.