Lake Zurich: Sales tax increase would help fix roads

Lake Zurich officials estimate a hike in the local portion of the sales tax will raise an additional $1.8 million to $2.2 million annually, all of which would be used for capital improvements and street projects.

But first, voters have to agree to the half-percentage point increase on the Nov. 2 ballot. If approved, the increase would take effect July 1, 2011.

Village administrator Bob Vitas said the village of Lake Zurich maintains 156 road miles, and right now there are $1.5 million in street improvements the village needs to make.

Finance Director Al Zochowski said the money also would be used to maintain and replace police cars, ambulances and fire trucks, adding the annual cost to replace vehicles is $800,000.

At Thursday's meeting, held at Sarah Adams Elementary School, Vitas said the additional funds would allow the village to get back on track within three years in both road repair and vehicle replacement.

At present, shoppers in Lake Zurich pay a 7 percent sales tax on what they buy. Of that, Lake Zurich receives 1 percent, with the rest distributed to Lake County and the state. By raising the local sales tax a half percentage point, Lake Zurich estimates it will pull in $7.6 million annually in sales tax receipts.

Zochowski pointed to areas with higher overall sales taxes, like 10 percent in Schaumburg and 9 percent in Long Grove.

Resident Chris Roberti said people do pay attention to the sales tax rate and may choose where to shop based on that.

"They will go to the closest community that has the lowest tax rate to purchase their things," she said.

Resident Eric Dubiel, arguing against the referendum, said he cannot understand how the village can raise taxes, especially a sales tax, which he said would affect the poorest who pay more for goods they need.

He also questioned whether the village is making the right decisions on how it is spending its money.

Zochowski countered, saying at least 50 percent of the money raised from a retail sales tax increase would come from residents outside of Lake Zurich - unlike the municipal utility tax increase, which affects only village residents and will expire in 2012.

"They come to Lake Zurich to shop, but they are not contributing to the cost to use those services we provide," he said.

The village plans to hold a town-hall meeting in October to further discuss the referendum.