Study shows suburban Cook businesses take hit over sales tax

A new study shows that businesses in suburban Cook, especially along the county line, continue to suffer under the burden of the increased sales tax.

The study, from DePaul University's Chaddick Institute for Metropolitan Development, shows that sales are down across the Chicago region in the tough economy, but most of all in suburban Cook County.

Sales declined 14.4 percent in suburban Cook County for the second quarter of the year compared with the same period last year. By contrast, Lake County saw a 13.3 percent decline and DuPage a 12.7 percent decline.

The study suggested it was no coincidence that the three collar counties that noticed the least decline - Kane at 12 percent, McHenry at 10.5 and Will at 9.7 - were also the three with the lowest average sales taxes.

"It's no surprise," said Cook County Commissioner Liz Gorman, an Orland Park Republican whose district runs along the western border to the Northwest suburbs. "It's economics 101. It's what we've been touting all along."

Gorman is among commissioners seeking to repeal a 1 percentage point county-imposed increase that raised sales taxes to a minimum of 9 percent in suburban Cook County, with many towns tacking on more.

Among the hardest hit were Northwest-suburban communities pinched between Lake, McHenry, Kane and DuPage counties. In the second quarter of the year, according to the study, sales were off a whopping 34.3 percent in the Cook County portion of Barrington Hills, which straddles several county lines, 17.8 percent in Elk Grove Village, 17.3 percent in Schaumburg and 16.4 percent in Hoffman Estates.

Bob Boho, owner of the BP gas station at 11 E. Dundee Rd., Wheeling, said he estimated a 15 percent drop in sales, in part due to customers driving to nearby Lake County to fill up. "They have a seven-, eight-cent advantage because of the Cook tax on gasoline, plus the increase in the sales tax," Boho said.

He said his cigarette sales were down by half. "For a can of pop and a candy bar, you're not going to go across to Lake County," he said, "but for a can of pop and a pack of cigarettes, you probably are."

"It doesn't take Warren Buffett to understand that when you raise taxes in those border communities consumers are simply going to go across the street," said Commissioner Timothy Scheider, a Bartlett Republican. He said particularly hard hit were so-called big-box stores like Best Buy, where "you can get like items just by going three, four miles down the road," at what is sometimes significantly lower sales tax.

Commissioner Gregg Goslin, a Glenview Republican, said that cut into the competitive pricing of an independent, family-owned store like Abt Electronics, to the detriment of everyone. "They're a big contributor to the tax base, and that's what you have to look at," Goslin said. "Tax revenue is down."

Of course, this phenomenon is nothing new. Sharon Pankey, of Wheeling, said she's been going to Lake County for 15 years for regular purchases, for instance to buy gas or liquor at Binny's. "I have not taken the time to price in Cook County," she said - but she knows it will cost more.

Cook County Board President Todd Stroger has defended the added sales tax, saying the county needed the money. "The county's in great shape," he said Monday. "We use our money wisely."

Many businesses, like Abt, which declined a request to comment on this story, don't like to draw attention to the area's higher taxes, even to complain. Yet Dan Devlin, owner of Southwest Fireplace, was uniquely positioned to notice it with his store's three outlets: one in Palos Park in Cook, one in Frankfort in Will and one in Aurora in DuPage.

"People are definitely aware of it," Devlin said. "We've had customers pick things out in Palos Park, and they go to Frankfort to buy it.

"I thought we would see it on some of the bigger purchases, but we even see it on a few hundred dollars," Devlin added. Business in DuPage, where the sales tax is 8.25 percent, hadn't altered that much, he said, in part because it's farther afield. Yet sales in Frankfort, where it's 7 percent, now outpace sales in Palos, where it's 9.5 percent, which didn't used to be the case.

"Frankfort is just south of the border," Devlin said.

Schneider intends to push a full or partial repeal of the 1 percent increase in the Cook sales tax imposed last year just as soon as Gov. Quinn signs recently passed legislation lowering the number of votes needed to override Stroger's veto on the County Board. An attempt to roll back the sales tax 0.5 percent failed by a single vote over the summer.

"Gov. Quinn needs to not let this thing gather dust," Schneider said. "He needs to sign this bill so we can repeal the sales tax."