Cook County commissioners approve sales tax increase
Sales tax rates in many Cook County suburbs will hit double digits Jan. 1 after the county board raised the rate by a penny on the dollar Wednesday to shore up pension funds.
The move pushes the sales tax in unincorporated areas to 9 percent, including state and Regional Transportation Authority charges. But many suburbs have their own 1 percent sales tax, raising the total sales tax to 10 percent, or $10 on a $100 purchase.
Chicago's rate — and a few suburbs' — will climb to 10.25 percent, the highest among big cities in the nation.
County President Toni Preckwinkle pushed the increase and won support from nine commissioners over the objection of seven others, mostly from the suburbs, who said businesses will lose out when buyers head for neighboring counties where sales taxes are in most cases 2 cents per dollar lower.
Scott Price, owner of Toms-Price furniture stores, said the tax increase will hurt sales at his Cook County stores. Of the five Toms-Price stores, two — in Skokie and South Barrington — are in Cook County.
Price was among representatives of business and civic organizations, including the Illinois Retail Merchants Association and Civic Federation of Chicago, testifying against the tax increase Wednesday before the Cook County Board Finance Committee.
Earlier this month, Elk Grove Village Mayor Craig Johnson said the village could see its revenue drop by nearly $900,000 next year if the sales tax increase was approved. The village has its own 1 percent sales tax, making the total 10 percent for the majority of the village that's in Cook County.
But county workers, retirees and union representatives testified in favor of the increase they say is needed to protect promised retirement benefits.
Preckwinkle, who followed through on a campaign promise to repeal an earlier sales tax hike by her predecessor, former President Todd Stroger, said the tax increase will put the county on a “long-term path toward financial stability.”
Suburban commissioners, including Tim Schneider of Bartlett and Larry Suffredin of Evanston, opposed the increase. Schneider, who is also chairman of the Illinois GOP, said he has heard from leaders in numerous suburbs who fear they'll lose business revenue.
Along with Elk Grove Village, some towns that will hit an overall 10 percent sales tax rate are Arlington Heights, the Cook County portion of Buffalo Grove, Des Plaines, the Cook County portion of Hoffman Estates, Mount Prospect, Palatine, Rolling Meadows, the Cook County portion of Schaumburg, South Barrington, Streamwood and the Cook County portion of Wheeling, according to the Illinois Department of Revenue.
Sales taxes will climb to 10.25 percent in Rosemont and in the Cook County portions of Bensenville, Elgin and Hinsdale, as well as in the business district of Mount Prospect.
The increase will push the sales tax to 9 percent in unincorporated Cook County. The county will get 1.75 percent, the RTA gets 1 percent and Illinois gets 6.25 percent.
The sales tax is 7.25 percent in DuPage County, and Kane, Lake, McHenry and Will counties each have a 7 percent sales tax, plus municipal sales taxes.
The new tax will become effective next January, meaning the county will lose out on added tax revenue from holiday sales this year. Preckwinkle said the county is required to inform the state by Oct. 1 what the sales tax will be starting in January.
The increase is estimated to raise roughly $473 million a year to help balance next year's budget and shore up the underfunded pension system.
Finance committee chair John Daley, a Chicago Democrat, defended the increase. Daley says Preckwinkle has worked to restore confidence and fiscal solvency to county government since defeating Stroger in 2010.
Along with Daley, voting in favor of the increase were commissioners Luis Arroyo Jr. of Chicago; Jerry Butler of Chicago; Jesus “Chuy” Garcia of Chicago; Robert Steele of Chicago; Deborah Sims of Chicago; Stanley Moore of Chicago; Joan Patricia Murphy of Crestwood and Jeffrey Tobolski of McCook.
Voting against it were commissioners Richard Boykin of Oak Park; Bridget Gainer of Chicago, Gregg Goslin of Glenview; Peter Silvestri of Elmwood Park; and John Fritchey of Chicago, along with Suffredin and Schneider.
Commissioner Liz Gorman of Orland Park voted present after announcing that she intends to resign to take a government relations job in a private company. which she would not name.
“I understand this was not an easy vote,” Preckwinkle told reporters following the board meeting. “Frankly, it was not an easy proposal for me to move forward.”
She said even after she spent recent years reducing county expenditures and payroll costs, the county's “pension tsunami came at us.”
Preckwinkle has said she will consider rolling back the sales tax increase if lawmakers in Springfield approve a county pension fix.
However, that is in serious doubt after the measure stalled in 2014 and again this spring. Lawmakers are currently deadlocked over a state budget that was supposed to be enacted July 1.
Preckwinkle said the alternative was to raise property taxes to come up with additional revenue.
“There was not one commissioner who was in favor raising property taxes,” she said. “We saw a path to getting nine votes to raise the sales tax, so that's what we pursued.”
Daily Herald writer Jake Griffin contributed.
Comparing sales tax
The Cook County Board approved a penny-per-dollar sales tax increase Wednesday, pushing the rate to 9 percent in unincorporated areas.
In comparison, neighboring counties' rates are:
7.25% in DuPage County
7 percent in Kane, Lake, McHenry and Will counties
Many suburbs have additional sales taxes.
Those will push the total sales tax to 10 percent or higher in many Cook County suburbs.
A list is here: <a href="http://www.dailyherald.com/article/20150225/news/150229279/">www.dailyherald.com/article/20150225/news/150229279/</a>
Source: Illinois Department of Revenue