The Woodstock City Council should not impose a new home rule sales tax that would tack on a percentage point to Woodstock’s 7 percent sales tax rate.
The city first proposed the increase after lowering its portion of Woodstock residents’ property tax bill by 10 percent. About $779,000 is earmarked in the city’s budget to come from the home rules sales tax to go toward offsetting the loss of revenue coming from the decreased property tax levy.
Despite the decrease in the property tax levy, the city still will be taking money from Woodstock residents if a new sales tax is imposed. If city officials really wanted to save the taxpayers money, they would lower the city’s portion of the property tax levy and not implement any additional taxes.
The sales tax also would be regressive, meaning lower-income residents would be hit hardest.
The city has the option to raise the sales tax in quarter percentage points. Surrounding home rule communities, such as Algonquin and Crystal Lake, have used their home rule status to raise sales tax rates by 0.75 percent.
If Woodstock raises its sales tax by 1 percent, business owners in the city will be at a disadvantage when it comes to competing with its neighboring municipalities.
Companies in Woodstock that sell large-ticket items have voiced opposition to the tax, saying it would decrease Woodstock’s ability to compete in the region, particularly for things such as lumber supplies. The home rule sales tax would be placed on “nonessential goods,” which would not include things such as food from grocery stores or prescription and nonprescription drugs. Titled vehicles also would be excluded.
The city needs to support its businesses, or some may relocate out of the city, or out of the state.
City officials in January 2016 approved a special census in an effort to achieve home rule status and officially formalized its status six months later. Communities with more than 25,000 residents automatically are home rule. The move sparked pushback from some members of the community, including a group called Voters in Action, who said the city’s home rule status would lead to higher taxes. It turns out their fears were warranted.
If a tax is imposed, it should at least generate money for a specific purpose. Some council members said they would only be in favor of the tax if the fund was dedicated to cover lost revenue from the 10 percent property tax decrease and road repairs and maintenance.
City Council members need to decide on a specific use for the funds, if the tax is implemented, and have a sunset clause so that once the necessary amount of funds have been raised for the identified use, the tax ends.
The Woodstock City Council has not imposed the
1 percent sales tax yet, and we strongly encourage it not to.