Hike in Cook County Sales Tax
As though we Illinoisans don’t have enough tax on our plate, Cook County President Toni Preckwinkle decided Tuesday to raise the sales tax rate by 1%. Ironically, this same Preckwinkle opposed tax increase back in 2010. But maybe that was when she running for office…

 

Average Effective Sales Tax per Age Group

Average Effective Sales Tax per Age Group

Preckwinkle argues that the County’s employee pension situation is insufferable. There are nearly 650 locally run pension funds in Illinois, which cover retired police officers and firefighters, along with one consolidated fund for municipal retirees, called the Illinois Municipal Retirement Fund, or IMRF. Many of these funds are nearing insolvency, destroying city budgets, and forcing cuts in local services. Springfield, for instance, has cut its police force by nearly 15 percent since 2007. Preckwinkle’s only other option for mitigating the situation would be a property tax, but tax rates on low-income suburbs are already disproportionally high. What to do?

Preckwinkle decided to increase the sales tax by a penny on the dollar in order keep the county financially stable. If approved, the sales tax increase would be introduced January 1 and raise an estimated $473 million a year.

Those hardest hit would be local retail: places like furniture stores, shoe stores, jewelry stores. Many owners fear that customers will simply go elsewhere. “It will kill all the businesses,” said Peter Mathew, who owns gas stations in Palatine and Arlington Heights, not far from Lake County. “It will drive all the border customers to the other counties.”

In Lansing, Mike Horvath, who has owned his jewelry shop for 18 years, contended the tax increase would hurt already struggling small businesses.

In the meantime, the proposal needs the support of nine of the county’s 17 commissioners – and that may be hard to get given the backlash that unfolded in 2008 after the County Board increased the sales tax by 1 percent.

Poor Preckwinkle caught between a rock and hard place but wouldn’t Cook County lose business if her proposal goes through? Preckwinkle disagrees. Her prediction? Chicago and the rest of Illinois will hike their taxes too.

Article by Leah Zitter, dbfchicago.com Writer