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MADISON - ST. CLAIR RECORD

Saturday, November 2, 2024

Sales tax proposal repeats request for more; Opponent says rates will be among highest in country

Law money 06

Proponents of a 1 percent sales tax hike in Madison County are hoping that the third time in seven years is a charm.

Even though voters overwhelmingly rejected the County Schools Facilities Sales Tax (CSFT) in 2011 by a margin of 81 to 19 percent, its narrow defeat in 2017 by a margin of 50.3 to 49.7 percent, or just 259 votes, may have signaled it could pass if tried again. Then and now, the CSFT has made it onto the ballot as a result of school boards advocating for its passage. This time around, however, only Collinsville CUSD 10's board voted against asking for more in sales tax.

When voters head to the polls on March 20, they will be asked basically the same question as the last two failed referendums: Shall a retailers' occupation tax and a service occupation tax (commonly referred to as a "sales tax") be imposed in the County of Madison, Illinois, at a rate of 1 percent?

According to a newspaper ad paid for by the Alton Community Unit School District 11, seeking extra revenue by way of sales tax is a "means to equitably share the cost of school district maintenance and improvements," such as roof repairs, HVAC and window replacements. It says that through this measure, an estimated 30 to 40 percent of sales tax revenue would come from people living outside of Madison County.

The ad also says that the burden of funding maintenance expenditures comes solely from property taxpayers, but through CSFT, property owners will get relief as a percentage of the new revenue will be used to reduce property taxes.

A group opposed to the proposal - Madison County Citizens for Sustainable Education - says the claim that property taxes will be reduced is false.

"...A school board member cannot make a promise forever," the group's flyer states, "They can change their mind at any time.

"The purpose of this new sales tax is not to reduce property taxes. It’s to issue bonds, which could increase your property taxes."

Among the coalition of people against the measure is County Board member Phil Chapman of Highland, who said he has never seen any school board reduce property taxes. He also said that future school board members aren't obligated to keep promises made by their predecessors.  

"If they promise they aren’t required to do so," he said. "Later they may simply change their mind and pass another ‘off year’ referendum for even higher taxes."

He also said the tax is considered a "double barreled bond."

"If sales taxes prove insufficient to pay for the upwards of $500 million dollars of debt, your government is required by law to levy higher property taxes to cover bond costs," Chapman said. "The economy improves due to federal tax cuts. What if we suffer a recession and sales tax receipts go down? Government may have to raise property taxes just to pay off the bonds."  

Chapman also said the increase will hurt low income people or those on fixed income, because they may not have transportation to travel where sales taxes are lower.

If the increase passes, some communities in Madison County will rank among the highest sales tax rates in the country. According to TaxFoundation.org, Chicago and Long Beach, Calif. have the highest sales tax rates at 10.25.

Chapman said that the Granite City Business District Tax rate woud be 10.35, Collinsville 10.35 and Highland 9.85.

"That’s a chunk out of everybody’s s pocket," he said.

A Republican candidate for county board who also operates a home repair business, John Eric Foster, said he strongly opposes the sales tax proposal.

If the measure passes, Foster, who operates Honey-Do Home Repair in Granite City, said he would have to pass increases on to customers.

"In our profession, our suppliers and their raw materials have gone up for vendors," he said. "We can't absorb the higher tax; we have to pass it along to the consumer."

While the sales tax would not apply to medicine, groceries (unprepared food), cars, trucks, motorcycles, ATVs and farm equipment, it would attach to materials Foster said he buys for his business - lumber and concrete, for instance.

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