Cook County Businesses Fear Sales Tax Hike Would Send Customers Away
CHICAGO (CBS) -- Cook County Board President Toni Preckwinkle's proposal to increase the county sales tax – five years after she won office by denouncing an identical tax hike imposed by her predecessor – has some business owners on the county's outskirts worried they'll lose customers.
After taking office in 2010, Preckwinkle made good on her promise to repeal the so-called "Stroger Sales Tax" approved under former County Board President Todd Stroger, which already had been cut in half before she defeated him in the 2010 election.
Earlier this week, Preckwinkle proposed raising the sales tax by a penny on the dollar, because county government is facing hundreds of millions of dollars in pension debt, even after cutting spending.
Many business owners along the county's borders fear customers will flee Cook County, especially for purchases of high-end items.
South suburban Lansing not only sits on the Indiana state line, but also is located just a few miles from Will County.
Lawrence Mollo, owner of Cole & Young Jewelers in downtown Lansing, said when he heard about plans to increase the Cook County sales tax by a penny on the dollar, "I thought to myself, 'Oh, God, there goes more customers into Indiana.'"
"I'm half a mile away. We're already two percent higher, so they're going to be looking at a three percent savings. And on a larger item, it gets costly," he said.
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Mollo said Preckwinkle's proposal could be the proverbial straw that breaks the camel's back.
In Lansing, the sales tax rate would jump to 9.5 percent. In the city of Chicago, it would go up to 10.25 percent, making it the nation's highest.
In Indiana, the sales tax rate is 7 percent, and in Will County it ranges from 7 percent to 8.5 percent, depending on the town.
Mollo said it's hard to be competitive when there's such a big difference in taxes, and jewelers across the border already advertise lower sales taxes.
"You can't blame the people for leaving, but I think they're going to lose more in the long run than they're going to gain. I think that's going to be the straw that broke the camel's back. They're just going to flee Illinois," he said.
Mollo said he and other business owners will have to "weather it, and just hope that somebody comes to their senses, and realizes this is going to be … this could be devastating."
