Thursday, May 23, 2013

Why I Oppose a Sales Tax Increase for Grundy County

At a recent joint school board meeting of Grundy County school boards, the possibility of asking voters to approve a School Facility Occupation Tax for Grundy County was discussed.  For more background on this tax, see here.

As a member of the Minooka CCSD 201 school board and as a voter, I will be voting "NO" on the question of the tax increase.  Here is why:

1.  I have two children, currently attending Minooka CCSD 201 schools, who will one day be taxpayers.  I would like them to be able to afford to live in Grundy County if they so choose.  I am therefore opposed to increasing their future tax burden.  This is not a one time referendum for issuing bonds to build a school or two.  This is a permanent tax increase.  There is no provision in the statute for a county to decide that this tax is no longer needed (if it ever truly was).  So, on top of a recent 67% increase in the state income tax (from 3% to 5%), we would be piling on a 16% increase in our sales tax (from 6.25% to 7.25%).  I know many people are going to say that "this is for the children" (in fact, I have already heard this), but we should be careful what we do "for the children."  The people that are children right now are going to be taxpayers one day.  We should do everything in our power not to burden them with additional taxes.  Otherwise, they may find that it is too expensive to live in the communities in which they were raised.

2.  This would be a pure tax increase no matter what anyone would lead you to believe.  This is not swapping one form of tax for another.  It has been argued that school districts could lower their property tax levies to offset the impact of this tax.   Even if they could, that does not mean that they will.  There is no provision which requires them to lower property taxes in response to increased revenue from a sales tax.  If you think that some or even any school districts would lower their property tax levies in response to an increased sales tax, you are putting a lot of faith in school boards to look out for the interests of taxpayers.  A school board may promise to do this in order to get the voters to support the sales tax increase, but such a school board would have no legal obligation to fulfill the promise and, in any event, cannot bind a future school board (remember, the tax increase would be permanent).

3.  Voters will be giving up an enormous amount of control over spending on school facilities.  As it stands right now, school districts must come to the voters for approval to issue bonds for capital projects such as building new facilities or improving old facilities.  With this tax increase in place, the voters will be giving up the ability to control such spending.  School boards will no longer need to "sell" projects to the voters.

4.  This money will burn a hole in the pockets of many school boards.  Governments, even more than individuals, have a tendency to burn through any money that they can get their hands on.  If there is no pressing need to spend and they have money, they spend on what are arguably wasteful projects.  Right now, many school districts are feeling the pain of the recession (which brought about falling property tax revenues) and are looking for a way to raise more money.  Rather than cutting back on spending to make it through the rough patch, they want to increase revenue.  Once we get through this rough patch, however, they will still be collecting money through this tax, even though they will no longer need the revenue.  Again, this tax is permanent.  You will be paying the tax whether the school districts need it or not.  And it can only be spent on school facilities.

5.  The revenue from any potential tax increase can only be spent on school facilities.  It can not be spent "in the classroom."  Some school districts in Grundy County may need new facilities now or in the future.  This tax would be collected on behalf of all the school districts in Grundy County whether they need new facilities or not.  Let those school districts that have a need for new or improved facilities ask the voters of their districts for approval to issue bonds to fund such projects.  That way, taxpayers in those districts that don't have such a need will not have an additional tax burden.

6.  A sales tax is the most regressive form of taxation.  That is, it has the most impact on those who are least able to pay the tax.  Everyone who buys goods in the county will see their sales taxes increase.

7.  There has been some talk about how many people who are not residents of Grundy County will pay this sales tax.  Well, I doubt that the percentage of such people is very high compared to those of us that live and shop in Grundy County.  So, I doubt that there will be much of a subsidy from non-residents.  But, even if there were, how is it fair to try to shift the financial burden of educating our children to others?


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