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http://www.dailyherald.com/story/?id=334506
Study shows suburban Cook businesses
take hit over sales tax
Daily Herald
By: Ted Cox
November 11, 2009
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."
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