In the News

News Sun, March 8, 2007

Lake County legislators and officials expressed concern Wednesday about the potential impact of Gov. Rod Blagojevich's proposed gross receipts tax on local businesses.

County Board Chair Suzi Schmidt said she is worried about the possibility that additional state taxes could hurt business recruitment efforts.

"I don't know enough about what it's going to do to businesses," Schmidt said. "We are concerned because we always are working hard to bring businesses to Lake County and to get them to stay in Lake County. We don't want anyone leaving."

Schmidt said there are concerns that such a tax could give Wisconsin an edge over Lake County in business recruitment efforts.

David Young, president of the Lake County Partners economic development group, said he has similar concerns, although more details are needed about which businesses that would be included and which would be exempted from the tax.

"It may put Lake County businesses at a competitive disadvantage when they sell out of state and it may encourage businesses to source (purchase) components from out of state," Young said.

"Our whole goal is to make all of Lake County a productive place to do business," Young said. "This seems to be counter-productive to that goal. Our initial reaction is concern."

State Rep. Sandy Cole, R-Grayslake, said the proposed tax "would place a tremendous burden on local businesses and the consumers who will ultimately be forced to pay the cost. Many local businesses in northern Lake County could be driven to relocate over the border to Wisconsin to avoid this tax."

State Sen. William Peterson, R-Long Grove, said the governor's proposal didn't address major concerns of constituents in his district, including transportation improvements and property tax relief.

Instead, he said, "what really bothers me is that it's the largest tax increase in Illinois history."

"I want to see something concrete that deals with relief for seniors and homeowners," Peterson said. "For Lake County, all this is going to do is take money from our businesses."

State Sen. Susan Garrett, D-Lake Forest, said she thinks the governor's proposal is "extremely ambitious," but also said she has concerns about business impact.

"It would be great in a perfect world if we could support everything," Garrett said. "I strongly believe our businesses, especially in my district, have done a good job of supporting issues and creating jobs. I don't want our businesses to think we are not supportive or appreciative of them."

Peterson said he believes the issue is not strictly partisan and that the proposal will see modifications, "and in some cases may be stopped entirely."

"I think there is bipartisan skepticism," he said.

Area educators, too, voiced doubts over the governor's plan.

Jim Tenbusch, superintendent of Winthrop Harbor schools, noted: "Some form of gross receipts tax does hold some promise as a long-term solution to the school funding crisis in Illinois because of its sustainability.

"The only problem that I foresee is that taxpayers will be even less likely to approve a local tax increase when needed because GRT will be heralded as a 'total solution,' when in fact, nothing probably is," he added.

Ben Martindale, superintendent Gurnee Grade School District, said, "The governor has some bold initiatives -- the whole pension funding and the continued indicated elevation of support for schools. It's a point to start the discussion but I don't know if his initiative truly reforms how schools are funded in Illinois. Currently there is such a heavy reliance on the property tax and his plan doesn't speak at all to that."

Chuck Crowley, member of the Warren Township High School Board, pointed out Blagojevich "left out anything for relief from property taxes."

"That's a biggy. I think he'll have a hard time getting people on board with that kind of tax restructuring without giving anything back," Crowley said. "All tax hurts. The fairest tax is that which taxes most evenly. That being the case, gross receipts has a lot of things going for it, because it is fair."