When River Forest residents head to the polls on Tuesday, there’ll be a hot-button question on the ballot sitting there just below governor and senator: Do you want to raise the sales tax by 1 percentage point?
After months of sitting at village hall without much action by anyone either for or against the referendum, the River Forest Service Club is hosting a community forum Wednesday, Oct. 27 at Lincoln Elementary School, 511 Park Ave. in River Forest from 7 to 8 p.m.
Buzz Café owner and River Forest resident Laura Maychruk will moderate the forum, which will feature three people for the referendum and three against it.
In advance of the forum, two of the panel’s speakers — River Forest trustees Steve Hoke and Jim Winikates — agreed to talk with Wednesday Journal in a conference call to share their positions in an organized pre-forum debate.
Their comments have been edited for space.
Steve Hoke: It’s basic logic that if you want less of something, then you raise the price. You don’t have to be an economist to understand that raising sales taxes will have a negative impact of some kind. That’s not a theory, it’s factual.
With the sky-high property tax rates we all endure, the only competitive advantage for businesses to locate in River Forest is that we have a relatively lower sales tax.
This referendum eliminates that small advantage, and announces to the world that River Forest is not business-friendly. It’s not as if businesses and restaurants are lining up to open here now, and this would give them one less reason to do so.
As anyone who’s run a business can tell you, the easiest client to get is the one that you already have. The largest revenue generators in River Forest are Jewel, Dominick’s and Whole Foods. It would be foolish to ignore that Costco is opening up right across the street in Maywood.
…The proponents of raising the sales tax do not acknowledge the real-life impacts of this tax. They point out that we have lower sales tax than some surrounding towns, but they ignore the fact that we have dramatically higher property taxes that more than make up for the reduced revenue from the sales tax. A slightly lower sales tax doesn’t even begin to make up the difference to the beleaguered River Forest taxpayer.
The voters should send a clear and unmistakable message that the village should do everything in its power to cut the budget.
It’s time we said enough is enough. Raise taxes on businesses, and you get less businesses. Less businesses mean higher property taxes for homeowners. There are no easy answers, and raising the sales tax is not one of them. In fact, it could hasten the decline of our business district, and actually increase property taxes as the village becomes even more dependent on residential property taxes.
Jim Winikates: As a trustee, I think I have several responsibilities, and among those responsibilities is to make sure residents get the quality services that they expect in this village, and I think I also have a responsibility, as does every other trustee, to make sure we prudently manage the village’s financial resources.
There clearly is a relationship between these two responsibilities, which brings us to the problem that the village is facing. The problem that the village is facing is that its existing financial resources are not sufficient to deliver the same level of services in the future, and quite simply, that is the sole reason for this referendum. It’s a desire to maintain the services that the village currently maintains and that the residents expect to continue in the future.
People live here because they like the community, and let me give you a couple of examples. I like the fact that when it snows at night, I can get up in the morning and the streets are plowed. I like the fact that when the streets get in bad condition, the village repaves them; that the village trims the trees in the parkway, picks up the leaves in the fall from the curb.
I grew up in Chicago, and I can tell you that none of that happens there — none of it. I also like the fact that we have a declining crime rate, because we have a good police force that’s proactive in fighting crime in the village. I like the fact that we have a fire department where all firemen are trained emergency medical technicians.
But this all costs money, and we need the ability to pay for these services. That’s why we need this referendum. We’re not going to be able to continue to provide this same level of service to the village without this referendum, and that’s why we’re asking the village to consider this sales tax referendum. We want to be able to continue to give the residents of our village the kind of services that they expect, and the kind of services that make River Forest the desirable community that it is.
WEDNESDAY JOURNAL: Trustee Hoke, where would you come up with the cuts to fill the gaps in River Forest’s budget?
Hoke: There’s an assumption built into what Trustee Winikates is saying, and to some extent, in your question, that an increased sales tax will increase tax revenue, dollar for dollar, and I think for the purposes of this debate, I don’t accept that, I don’t think that that’s sound economics.
In fact, if Dominick’s were to close, it could actually decrease tax revenues, and I just want to point that out because I think that’s important.
I for one, had filed a dissenting report to the citizens’ (finance) committee which talked about structural changes. We have made some tremendous strides in the police department, and yet we did it reducing staff and reducing it dramatically.
We have not done the same thing in other departments, in my opinion, and it’s my opinion that we have to look very hard, and each department head has to look very hard. For example, I propose that we eliminate the position of assistant village administrator — that’s a total savings of about $100,000, all-in, which would create more efficiencies.
I think we need to look at consolidating fire departments, as a long-term solution, because the fire department is essentially one-third of our budget, and we can’t just forever say that it is off limits and we can’t touch it. That’s been the approach so far, and I think we need to break through that and push the capable leaders, like Jim Eggert, to cut the budget.
I think we should implement an auxiliary police force to reduce overtime. We should bring in part-time police officers to reduce pension costs. As we all know, pension costs are really the 2,000 pound gorilla in the budget.
WJ: Trustee Winikates, what are your thoughts on how the increased sales tax would affect those major tax generators in the village?
Winikates: Well first off, the increase in sales tax does not apply to groceries, it does not apply to drugs, it does not apply to medical equipment, so that has absolutely no affect. Steve mentioned Dominick’s earlier — there is going to be no increase on sales tax for groceries coming out of Dominick’s or Whole Foods, or the Jewel, or the drugs that come out of Walgreens. I don’t think that that aspect is certainly going to affect those businesses.
The second thing is, I think that when you’re shopping, you shop on price. You don’t look at the sales tax rate unless you’re doing a major, major purchase on something, like a $3,000 TV or something. Sure, it makes sense when you’re gonna do something like that to go to Oak Brook, where tax rates are lower, because it’s gonna save you a significant amount of money.
But you know, one cent on a dollar is not going to make a difference whether you buy something in River Forest or you buy it somewhere else. People shop, and they shop competitively for pricing, but they compare prices before sales tax. I think it’s not going to mean that much, particularly when the rates are the same as they are in the neighboring communities.
Hoke: I do think that you need to look at the big numbers. I think the average resident would say, look, that’s all well and good, but where are all these property tax dollars going? The property taxes are sky-high. This issue does not exist in isolation. It’s not just an issue of whether our sales tax is too low or too high, it’s an issue of whether all the tax revenue that the village collects is too low or too high, or could be cut in some places.
What we’re seeing is that the tax numbers in River Forest are far more than any of the competing towns. It’s not an issue of just the sales tax. Where’s all this money going? It’s not a question of “What should we cut?” From the taxpayer perspective, it’s a question of “You must cut, because I cannot afford this any more.”
We’re seeing a move away. Plunkett’s is now gone, and we’re replacing it with a non-sales tax-generating business. Lake and Lathrop, the proposed development for there, which currently has sales tax paying businesses on site, the proposed plan for that does not anticipate any sales tax revenue. All of the opportunities for sales tax are slowly being taken away, and if Dominick’s gets taken away, there’s yet another one.
We need to preserve what we have, and grow what we have, or at least maintain it, because the future for sales tax revenue is so slim.
…I think that the residents should send an unmistakable message that tax hikes is not the way they want to go, because I don’t think people can afford it any more. It’s unfortunate that we might need to cut some core services, but we might have to. You can only afford what you can pay for.
Winikates: Yes, taxes are high in River Forest, and it’s property taxes. I’d also like to point out that 70 percent of your property tax bill relates to District 90 and District 200. The village’s share of your property taxes is somewhere between 10 and 11 percent. Years ago, that percentage was closer to 15 percent.
While property taxes have gone up in the past several years in River Forest, the village’s share has gone down. The big increase, quite frankly, is in the schools. I think the village has been very sensitive to property owners’ concerns about property taxes, but we’re not the problem. The problem is, for most of the residents, the high cost of property taxes is related to the schools, pure and simple, and that’s much in line with other communities as well.
…I think that Steve raised a really good point, and that’s if you have to cut services, you have to cut services, and I think you’ve really identified the issue. The issue is, what’s more important: what you pay in taxes, or the services you get? There’s obviously a tradeoff there, and that’s what we’re asking the voters to decide.
Would you like more services, or would you like to keep them the same and keep the same services and maybe a little bit more? That’s the issue.%uFEFF