Friday, August 21, 2009 10:54 PM CDT
OUR VIEW: Schools now must 'sell' sales tax swap plan
By the JG/T-C
editorial@jg-tc.com
All three school boards in Coles County are supporting a referendum that would add a penny to the Coles County sales tax in exchange for reductions in real estate taxes.
The additional sales tax money would in part pay for facilities maintenance, financing costs, durable equipment, additions and renovations to buildings and related school building issues. The money could not be used for items such as salaries, operating costs, movable equipment, buses and detached furniture and fixtures.
A primary reason school officials will encourage people to vote for this proposal is that everyone who purchases items in Coles County, not just those who own (or rent) real estate, will contribute, therefore broadening the tax base.
So those from neighboring counties who shop here, people visiting to attend graduation, state track meets or other events, as well as those who commute into the market including private sector workers and staff and students in higher education who live outside the county, would share in funding school buildings with purchases made in Coles County.
The real estate tax relief would be a plus for those who live here and those who would consider moving here. Real estate taxes are one reason why people may choose to live somewhere else, or choose not to upgrade to a nicer home.
Maintenance is important to economically preserving the life of buildings over many years, thus benefiting taxpayers and students.
And the districts would generate more revenue than they are abating, which would help offset other costs and provide a solid revenue stream.
There also are concerns about the concept, including that schools control only their portion of the real estate tax bill, so schools could keep their word on lowering levies but the overall tax bill may not change much if other taxing bodies increase their levies.
Sales tax is by definition regressive, and therefore is harder on lower income families.
And now is not the time to be raising the sales tax, when many incomes are either flat or declining, and schools need to tighten their belts just like most of the rest of the area economy.
Some items would be excluded from the additional sales tax, including cars, trucks and ATVs, mobile homes, boats, most groceries, drugs, farm equipment and parts and farm inputs.
The General Assembly approved the local referendum option two years ago, and a few Illinois counties, including Champaign, have approved the increase.
So there are a lot of aspects to the proposal, and we anticipate a lot of healthy discussion in the coming months.
We look forward to hearing more both from the school officials and from area residents. The discussions at service clubs, coffee shops and other venues will help us all determine whether there’s a willingness to generate more money for schools in exchange for some property tax relief.
JG/T-C Editorial Board
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Mike P wrote on Aug 22, 2009 11:05 AM:
If not, an extra 1% on the sale of a home that saved 173 in property taxes with a 100k assessment, would be 1000, if it only sold for its assessed value.
For 1% sales tax to fill up its pool to 2 or 3 million a year, they have to tax 200 to 300 million every year of something. What ever it is, that is going to be 2-3 million less buying power every year in those markets, just to keep doing what we have been. In our stagnation can we afford to cut another 1% off the top of local buying power? Every 10 years, thats 20 to 30 million we are talking about shifting from consumers of something to a new fund for the schools. There is no guarantee any levy will be cut, or stay cut more than that first year if it is.
The last thing any local tax body needs is a new voter approved funding source. None of them have managed the ones they have, or have forced on voters, very good, and now they want a shiny new piggy bank too. They want this, they still have a long list of toy buildings on their wish list.
What does this sales Tax hit? "