Like all great legislative maneuvers, it happened quietly and fast, when almost no one was looking. At the end of last year’s legislative session, Jim McPike, a Democratic state representative from Alton, amended the sales-tax reform bill so that the General Assembly and the governor could control which municipality would get what portion of the annual sales-tax yield.
“We were tricked,” is how Charles Esler, a member of suburban Glenview’s board of trustees, puts it. “The great tyrant is a clever man. He tricked us again.”
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For example, a corporation with branches in Schaumburg and Evanston must compute two different rates. For larger corporations with outlets all over the state the result is what Brown calls “a bookkeeping nightmare.”
As legislators tampered with the sales tax, they created unforeseen problems as they tried to minimize revenue losses caused by reforms. At one point, for example, the state intended to pay for federally mandated waste-water facilities with some of the new use tax. To make up for that loss to the municipalities, the state decided to divert to them a portion of a newly created tax on photo processing. “It got more and more complicated,” says the state official. “Other issues kept being dragged in. For a while, the bill got beyond the idea of sales-tax reform, which in its genesis was aimed at simplification.”
The day after Ibata’s article Springfield buzzed with activity, as lobbyists, retailers, mayors, and other officials phoned their legislators to complain. In a November 23 follow-up article, Ibata quoted Madigan’s chief of staff, Gary LaPaille, who characterized McPike’s changes as an “honest mistake.”
On the other hand, McPike may have done Chicago a favor by unintentionally exposing long-overlooked inequities in the way the sales tax works. The sales tax provides many suburbs with a comfortable standard of living. As more and more stores follow their middle-class clientele from the city, the growing sales tax enables the suburbs to keep their property taxes low. The result is that relatively well-to-do suburbanites pay a smaller portion of their income on local taxes than poorer city folk do, and yet the suburbanites have better schools, parks, and services.
