Tax Rebellion Stirs Talk of Secession in Cook County, Illinois

Published July 1, 2008

A brewing tax rebellion in suburban Cook County, Illinois, which includes the city of Chicago, has local officials and some state lawmakers talking of forming a new county.

The anger at Cook County government was only inflamed on April 30, when County Board President Todd Stroger gave just one day’s notice that he would back out of an appearance in Palatine that had been arranged weeks earlier.

Even without Stroger’s presence, more than 100 persons attended the meeting to vent about a county government that has long had a reputation for political corruption and wasteful spending. The final straw for many of them, though, was the county’s imposition of a $436 million annual sales tax hike that takes effect July 1.

Nation’s Heaviest Burden

That tax hike, which takes the county’s sales tax rate from 0.75 percent to 1.75 percent, gives the area the nation’s highest total sales tax burden and makes businesses in communities on the Cook County side of border lines less competitive than businesses that in some instances are across the street.

“If Stroger had been there, we would have had 300 to 400 people, easily,” said State Sen. Matt Murphy (R-Palatine), who has introduced legislation allowing seven townships in the northwest corner of Cook County to form a new county government. “I was disappointed he didn’t come out here. It was another example of disrespect for the northwest suburbs by this county government’s leadership. According to the Daily Herald [newspaper], for every $7 we send the county, we get $2 back. They could at least pay attention to us.”

Stroger explained his decision to back out of the meeting by saying local officials had “changed the rules” on him. On Chicago Tonight, a local public affairs television program, Stroger said he learned officials would turn the meeting into a village board meeting instead of an open forum for him to discuss issues with residents. He said the meeting format would allow local officials to engage in “political grandstanding.”

Murphy scoffed at the explanation, saying the Illinois Open Meetings Act requires local governments to formally announce a meeting when a quorum of the board would be present at an event where public issues would be discussed. He said Stroger knew this when he agreed to the meeting and should have known it anyway as president of a county board that is also subject to the law.

3-Point Rate Difference

In Palatine and other communities in Cook County, the sales tax burden as of July 1 will be at least 3 percentage points higher than the burden in neighboring counties.

“We’re going to be at 10 percent and Lake County will be at 7 percent,” Murphy said. “We have Costcos equidistant from my house, one in Lake Zurich [in Lake County] and the other in Schaumburg [in Cook County]. Which one do you think people around here are going to go to? They’re putting us at a competitive disadvantage.”

The Cook County sales tax is one of two huge sales tax hikes to hit the county this year. On April 1 the Regional Transportation Authority, which oversees the Chicago Transit Authority, Metra commuter rail, and Pace suburban bus services, also raised sales taxes. They climbed from 0.75 percent to 1 percent in Cook County and from 0.25 percent to 0.75 percent in neighboring DuPage, Kane, Lake, McHenry, and Will Counties. The RTA tax hike is expected to bring in another $530 million a year.

That $530 million, though, will be spread across six counties. The $430 million Cook County tax hike applies only there.

Becoming ‘Crook County’

One Cook County Board member, Republican Tony Peraica, did attend the Palatine meeting. He echoed Murphy’s sentiments, blasting Stroger for failing to “show the respect that the people of the northwest suburbs deserve.” He added “there’s good reason” that Cook County is “beginning to be known nationwide as ‘Crook’ County.”

As for the possible creation of a new county, Murphy said it’s a longshot that he’s hoping to make.

“I have had conversations with members on both sides of the aisle,” Murphy said. “I want to get more information on what a new county could look like, what revenues and expenses could look like. If we could do something compelling, we would go to the people to get their legislators to rally for this.”

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