Palatine maps defense against sales tax hike
Officials in Palatine will work in the coming weeks to see what can be done to alleviate the major sales tax disparity that will soon plague the suburb.
After news last week that the village wanted to secede from Cook County, elected officials in Palatine said on Monday they want to look at options that could help keep economic development in the town viable. Secession from Cook County is still among the options.
Right now, the Palatine sales tax rate is 8.75 percent. After an RTA hike in April, it will go up to 9 percent. Once the new county sales tax increase goes into effect July 1, Palatine shoppers will pay 10 percent.
Across the border in Lake County, neighboring Deer Park now has a sales tax rate of 6.5 percent. After the RTA hike, it will go up to 7 percent, 3 points less than Palatine.
Officials estimate that if Palatine loses 5 percent of its sales to shoppers going elsewhere, the village will lose about $620,000 a year.
"We're going to have to start reducing services or look elsewhere for revenues," said Village Manager Reid Ottesen. "That is why this is such a big issue."
After a request from village councilmen, Ottesen laid out two options for officials to consider.
One is to form a new county with surrounding towns. To start that, a petition would need to be signed by 51 percent of electors. Then, a county-wide referendum would take place.
Another choice is to merge with an adjoining county, like Lake County. To do that, 51 percent of electors would also need to agree. After that, a referendum of Cook and Lake county residents would be needed for the change.
Councilman Jack Wagner wants to further study the options. He likens the situation to a family.
"When your kids grow up, they eat you out of house and home and you can't continue to support them," he said. "It might be beneficial to Cook County if they don't have this burden of having to take care of the people in the Northwest suburbs."
Councilman Scott Lamerand said he wants to form a coalition with neighboring communities to see what else can be done. Officials agree they need to find out who else is interested in preventing the sales tax disparity.
Mayor Rita Mullins has also invited Cook County Board President Todd Stroger to an upcoming council meeting. Officials want to ask him what additional services Palatine will be getting as a result of this tax increase.
"We would like to know from Cook County what we are being asked to pay for," Wagner said.
Palatine officials are quick to point out that after Sept. 11, the village had a shortfall in their budget and did not pass that along to taxpayers.
"We did not go and raise taxes or cut services," said Mullins. "We tightened our belt. I want to know what has been done to tighten the belts of the county."