Opinion: No need to rush on county sales tax hike

SHARE Opinion: No need to rush on county sales tax hike

Cook County once again will have the highest sales tax in the nation if a proposal by Cook County Board President Toni Preckwinkle is approved by the County Board.

The proposal is a 1 percent increase in the sales tax, which would mean Cook County consumers would pay a nation-leading sales tax of between 10.25 percent and 11.25 percent. The highest rate, 11.25 percent, would be paid by consumers in the Metropolitan Pier and Exposition Authority area, comprising most of the City of Chicago’s core.

OPINION

President Preckwinkle has stated she would like the Cook County Board to approve this increase by the end of July. This increase is being proposed before the county’s expenses are known and before the budget is fully vetted. The county has until Oct. 1 to notify the Illinois Department of Revenue of a sales tax rate change that would begin on Jan. 1, 2016. If the county wanted a full debate on the issue, and the taxpayers deserve this debate, it should have the conversation as part of the annual budget process.

So, the question is: Why the rush?

Preckwinkle deserves a great deal of credit for keeping the campaign promise she used to win her first term. That promise was to roll back the nation-leading sales tax imposed by her predecessor. We are grateful that she made good on that promise. But now, we are concerned that her desire to increase the sales tax will push more sales out of Cook County into neighboring counties, where taxes are significantly lower, and online, where taxes can be non-existent.

Clearly, Cook County faces fiscal challenges related to its pension liability. But instead of pushing through a tax increase, we would encourage the County Board to use the upcoming months to:

1) Detail the county’s fiscal year 2016 proposed budget and fully explain their challenges. This also helps everyone figure out if such a drastic increase in the sales tax would even fix the challenges. Cook County’s chief financial officer, Ivan Samstein, has a good presentation that provides valuable and insightful information but needs to be dissected. Everyone would benefit from the enhanced transparency.

2) Give the Illinois General Assembly and Gov. Bruce Rauner every possible opportunity to pass the legislation the county needs to help with its pension obligations. President Preckwinkle stated she would “reconsider” the sales tax increase if Springfield passes the county’s pension reform bill. Why not give them that time by waiting until the last possible moment to reach for new tax monies?

Why ask county commissioners to vote on a tax increase in July when it might not be needed come Oct. 1? Why give Illinois another bad economic development headline unnecessarily?

Every mention of President Toni Preckwinkle has to start with a recognition that she has tried to do a very good job of controlling costs and returning Cook County to stable financial footing. She is to be applauded for desiring to tear up the proverbial credit card by stopping debt deferrals and fund sweeps. Like the City of Chicago and the State of Illinois, decades of pension mismanagement is coming home to roost all at once. Nevertheless, tax increases should be the last option — not the first.

We strongly urge the County Board to approach this rationally by using the time between now and Oct. 1 to fully vet this and other ideas to thoroughly address expenses. Slow down. Be transparent.

Rob Karr is president/CEO of the Illinois Retail Merchants Association.

Theresa Mintle is president/CEO of the Chicagoland Chamber of Commerce.

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