Suburban Cook County experienced the biggest drop in sales tax revenue during the second quarter relative to the six collar counties, according to a study released Wednesday.Outperformance of Chicago
Sales tax revenue plummeted 14.4% during the April-June period from a year ago, based on a study conducted by the Chaddick Institute for Metropolitan Development at DePaul University. That followed a 12.1% drop in the first quarter and compares with a regional average of an 11.8% slump. Suburban Cook County excludes Chicago and Evanston.
The recession has hit the heartland very hard,� says Joseph Schwieterman, director of the Chaddick Institute and professor of public service at DePaul. However, �crossing the 10% threshold has appeared to have changed the consumer�s buying experience.�
For all of 2008, sales tax revenue fell 4.5% in suburban Cook County. That compares with a 4.1% decline for the region on average, the study showed.
Cook County�s second-quarter revenue loss topped a 13.3% drop in tax receipts in Lake County. DuPage was next with a 12.7% decrease.
Just near the edges of Cook County, sales tax revenue has plummeted as well. The village of Barrington Hills, near Lake County, posted the biggest loss, down 34.3%. The village of Barrington followed with a 19.5% loss in sales tax revenue.
The city of Chicago fared better than the rest of Cook County, posting a 9.6% drop in sales tax revenue in the second quarter. That's after an 8.6% decline in the first quarter for the city vs. a 12.1% drop for the suburban county.
The report attributed the relative outperformance of Chicago, in part, to the addition of new big-box stores, which helped improve the quantity and price-competitiveness of the city�s retail sector and reduced the drain of retail dollars to neighboring communities.
The report Crain cited claims big-box stores helped sales in Chicago. I disagree. Once stores reach a saturation point they actually decrease sales because of competition of lower prices.
Chicago held up better than the Northern suburbs because many in Chicago are spending every dime they have on food, gasoline, clothes, and other day to day living expenses.
Contrast to Barrington, one of the richest areas in the entire state.
The village of Barrington Hills, near Lake County, posted the biggest loss, down 34.3%. The village of Barrington followed with a 19.5% loss in sales tax revenue.
The wealthy can afford to cut expenses far more than the poor who already spend every dime they have. One would (or should) expect to see the poorer suburbs affected less than the wealthier ones.
I believe the Chaddick Institute Study missed the mark in concluding box-stores helped Chicago.
Chicago Raises Property Taxes
Inquiring minds are disgusted with what Chicago and Cook County are doing about revenue shortfalls. Please consider Property taxes going up in Chicago and Cook County.
October 20, 2009Chicago Proud To Say "We Have The Highest Taxes In The Nation"
Probably not much of a shock, but it�s now official: Collectively, homeowners and businesses in Cook County are being hit up for 4.2 percent more in property taxes this year than last.
The semi-annual round of property tax bills will be arriving in mail boxes across the county in coming weeks, and most will be bigger than last year. Results will clearly vary from house to house, shop to shop and factory to factory, but the total property tax burden for Chicago taxpayers will rise more than 6 percent over last year, the clerk�s office said. Suburban taxpayers as a group will see a lower increase, but it is difficult to come up with a comparable projection because most communities are comprised of a plethora of taxing districts that apply to some residents and not others.
Despite last year�s housing market crash, tax officials calculate that property values for tax purposes rose 8.23 percent in suburban townships and 9.96 percent in the city. The calculation includes an array of moving parts, not the least of which is the gradual phase out of a program to limit assessment increases that was implemented at the height of the housing market boom earlier this decade.
On July,1 2008 CBS News reported Taxes In Chicago Now 10.25 Percent, Highest In Nation while asking the question "Sales Tax Hike In Effect; Will Shoppers Revolt?"
Chicago is no longer the "Second City" when it comes to the sales taxes. Thanks to a 1 percent sales tax increase that went into effect Tuesday, we're number one in the nation. Some shoppers are promising to revolt, but will they?Chicago is driving business away and destroying property values by raising sales taxes and property taxes. It should be reducing taxes and cutting expenses. The fact that Chicago has the highest taxes in the nation strongly suggests it has the most bloated bureaucracy and overpaid workers in the nation to go along.
The 1 percent increase hikes the sales tax in Chicago to 10.25 percent. By comparison, the sales tax in Lake and Will counties is 7 percent, and in DuPage County, it's 7.25 percent.
A sales tax of 10.25 percent is also significantly higher than the sales tax in other major cities. New York, Los Angeles and Dallas all have a sales tax of less than 8.3 percent, Phoenix has a tax of 6.3 percent, and Denver's sales tax is only 3.6 percent. Birmingham, Ala., earlier this year passed a sales tax hike--to 10 percent.
It will definitely be cheaper to shop in the suburbs. Buy a $500 TV in DuPage County where the taxes are 6.75 percent and you'll pay $534, in Chicago where the taxes are 9 percent, you'll pay $545 for that same television, and when taxes increase to 10.25 percent, you'll pay $551.
"It's kind of frustrating," Ashmalla said. "I go to Best Buy or something, and high-priced electronics � it adds like $20, $30 to a TV I bought." "I'm not going to be purchasing in Chicago much more � not electronics or anything high-priced," he said.
Cook County Commissioner Tony Peraica (R-16th) was one of the commissioners who led the fight against the tax hike. He says it's not too late to repeal it.
He plans to introduce the measure to repeal the sales tax at the next County Board meeting in mid-July, but he predicts getting his proposal to pass will be a challenge.
Leading a "tax revolt" outside the James R. Thompson Center on Tuesday, across the street from the County Building, Peraica told angry consumers, "This is nothing but a corruption tax ladies and gentlemen. Corruption equals higher taxes..."At Left: A DuPage County gas station advertises that customers don't have to pay the high taxes of stations in neighboring Cook County.
Businesses are concerned that consumers will leave Cook County to make purchases, and some businesses outside the county are capitalizing on the opportunity already.
Some residents of Palatine have been so upset by the tax hike that they have even talked about seceding from the county.
I wish Palatine would follow through with succeeding from the county. The madness has to stop.
Chicago should be thankful it did not get the Olympics. It would have made a boondoggle out of them.
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List
No comments:
Post a Comment