Henry County is back knocking on the door. For the third time, they are trying to pass a local-option sales tax. This time, it is to repair the courthouse, a building they are responsible to maintain. However, from their obvious neglect, they now wish to transfer this responsibility for the cost of repairs to the shoulders of our local merchants. The county trusts these entrepreneurs will generate enough in retail sales to pick up the tab.
When individual cities create a sales tax or raise their existing tax, it “does not” create a negative effect on neighboring communities. However, if a larger government entity (county) with the capability to impose a sales tax “district wide” should do so, it in fact, is taking money out of all the downtowns in the area.
Yet Henry County indicated it would like to see growth in population, economic development and job creation as priorities. That thought seems to have little substance. By pursuing this revenue, for this specific purpose, it harms communities in Henry County by affecting their tax base and could have a boomerang effect for the county.
Sales tax is vital to the local governments who provide many important services to their commercial area. Thus, if for no other reason that courtesy, local officials seek and respect business commentary on such matters.
Our cities, towns and villages supply the infrastructure necessary for growth. For water, they provide the wells, treatment plants and distribution lines. Sewage services also require an extensive treatment facility and sanitation lines along with storm-water distribution. Just to build streets with the above utilities can easily cost a million dollars a mile, and the city has a lifetime of maintenance and replacement.
Thus, communities with these services are a nucleus for schools, medical centers, libraries, telephone, Internet providers, and, of course, the necessary business district. They provide a venue for participation in the arts, local customs, festivals and a host of other social activities.
People looking to relocate and people who want to invest in a business require the above. They will not even give Geneseo a second look if these facilities are not adequate and up to standards.
It is evident that for Henry County to grow, it is the cities “that will determine” if they want the responsibility of financing the debt, management problems, liability and a life-time of maintenance and replacement of infrastructure.
To cover these expenditures, there is no way property tax can do that and still provide venture capital for future growth. Geneseo is one of 10 property taxing districts in the county. Property tax on a house with an asset value of $250,000 according to the county would be $6,200 per year. Of those 10 taxing districts, education is first in line and receives the largest share. The county is second in line for $745.14 per house and Geneseo is fifth, for a meager $414.19 per house.
History shows a major part of the solution lies in two taxes—sales tax and hotel/motel tax.
Sales tax is historically a grandfathered major revenue source for cities. The county, by failing to
recognize this fact, chooses to compete for a portion of this revenue stream. Geneseo is at 6.75 percent but will have to collect the county’s .25 percent tax should it pass, pushing the city’s tax level to 7 percent. The same is true in Kewanee and Colona.
The county tax will take tens of thousands of dollars out of area business districts every year. In a period of six to 10 years, the total will exceed $2.5 million.
The county has not invested one dime in the creation of our retail centers, and they have no expenses involved in maintaining or enhancing our downtowns. Plain and simple, this is skimming the cream off the top of the milk.
A sales tax conference with 35 Illinois cities attending was held in the Chicago area in 1997. I was invited to participate and one mayor stated, and I quote from the minutes, “If it means sharing revenue and not costs, we never would approve a mall, because there are many costs associate with it.”
Sales taxes make the payments on our bonds. Our sales tax provides venture capital so we and the county can grow. Sales tax can provide the 20 percent of the funds we need to obtain most grants. On a million dollar grant, based on 80/20 percent, we would need $200,000 in the bank.
The present county board cannot commit future county boards to honor a sunset clause. Such clauses and lockboxes are media sound bites and nothing more. Their tax will live forever.
When the economy went south, the panacea for revenue became the local-option sales tax. Around the U.S., the “go green movement” wanted sales tax revenue. Davenport’s “promise” was to send every student to college from sales tax revenue. Historical societies want sales tax revenue. A humane society sought sales tax revenue. Quad City school districts wanted the tax for building repairs. Henry County wanted local-option sales tax revenue for a “public safety tax” and now for the second time for “courthouse repairs."
The 2010 census is predicted to again show a lost of population. What has been tried for decades in the past has not worked. Henry County communities are on the move. There have been some failures but also many successes. I trust you will vote no at the polls on Feb. 2.
Ken Schloemer, Geneseo
