Crystal Lake Raises Sales Tax 75%

With a mere one week’s notice to the public, the Crystal Lake City Council voted 6-1 to raise the city’s sales tax from 1% to 1.75%–a 75% increase.

Only Councilman Jeff Thorsen voted, “No.”

Arguing that having a lower sales tax than Algonquin had not kept shoppers in Crystal Lake, the council majority followed Mayor Aaron Shepley’s lead.

“If you keep doing what you did, you’ll keep getting what you got,” Shepley asserted in his summation right before the vote. “The only truly bad decision would be to take no action.”

Shepley denigrated Governor Rod Blagojevich as being “absolutely ridiculous,” pointing out that the Democrats had one-party control in Springfield “and they still can’t figure it out.”

I couldn’t figure out what this had to do with the discussion at hand. Maybe you can.

Expecting heat, as did the other five who voted, “Yes,” Shepley pointed out that unlike the Springfield politicians with their salaries and their pensions, members of the city council “barely” get paid an amount that “covers the cost of elections.”

He predicted that the tax hike would “make half of the people angry.”

Explaining that people think “government should be run like a business,” he pointed out that “there not too many businesses out there” that haven’t raised “their prices to keep up with inflation.”

What Shepley did not point out is that as the price of food and other items purchased at retail stores increase, so does the sales tax take. Same with property taxes increasing with home value, of course, although several officials stressed the city’s lack of a corporate fund (which doesn’t seem to me to be the same as having no city property tax at all).

Shepley pointed to other cities that have had to go to referendum to raise taxes.

Of course, home rule cities like Crystal Lake, don’t have to go to the voters to raise taxes, as was proven last night.

“So, there’s no waste.”

That is a bold assertion for the only unit of local government that still replies to my Freedom of Information requests with high cost certified letters.

I consider that pure waste. (And I think the postage you can see above, if you click on the image, was before postal rates went up.)

The most discussion was over a piddly extra $100,000 for economic development. Chamber of Commerce Executive Gary Reece and the head of the city EDC made a big deal about it, as did some city council members.

That’s 2% of the $4.7 million that the 75% sales tax hike is expected to raise in the first twelve months.

If the city fathers and mothers want to squeeze $100,000 out of the current budget, they ought to be able to do it. (If they want to hire this ex-U.S. Bureau of the Budget budget examiner and holder of a master’s degree in public administration from the University of Michigan to do it, I’m available.)

Shepley and others made pitches for the poor shape city streets are in and how part of the sales tax increase would go for repaving. Several pointed out the increased cost of motor fuel increased the cost of asphalt, too. (They did not point out that the higher prices at the pump increased the city’s sales tax take, however.)

Arguments were made for hiring four more city policemen because the city is slightly under the national average.

Relocating the railroad tracts to open up now landlocked potential retail space also drew support.

There was a lot of fancy footwork defending the development of Vulcan Lakes into a recreational area as a reason for the sales tax hike.

In terms of “need” versus “desire,” it seems to me that Vulcan Lakes is clearly a “desire.”

Shepley admitted as much:

In terms of pure necessity, the toughest call is Vulcan Lakes.”

After talking to the local chapter of AARP, Shepley brought this away,

“They’d be very interested in having Vulcan Lakes open.”

Banker Thorsen’s take:

“I firmly believe that project can fund itself.”

The mayor argued that at least a sales tax puts “people in the position of being able to choose.”

“You can choose (to shop) at Super Walmart and Menard’s in Woodstock.”

Opposing the tax hike were two people.

The first was Joe Cramer of South Oak Street.

Retried, Cramer pointed out that he and others similarly situated were on fixed incomes.

Alluding to the recession, he cautioned that people would be facing the higher sales taxes while they might be under the treat of losing their jobs.

Finally, he pointed to the rising rate of inflation, shown by $3.35 cent per gallon gasoline and a threatened 2% hike in electric rates in June.

He also brought up what he called the “CTA sales tax.”

Combining that—which goes into effect April 1st—with the city tax hike, the total sales tax will inc increase 19% in Crystal Lake.

“It’s pretty steep,” he said. “I think you gentlemen and ladies should put this on ice. It will lead to the disuse of the retail (sector) in Crystal Lake.”

I was the only other opponent.

I pointed out that the city’s own TIF consultant had said

  • that Vulcan Lakes would produce over $100 million in subsidies,
  • that the railroad relocation costs should be borne by the two land owners who were going to benefit from direct access to Main Street,
  • that the Main Street Tax Increment Financing district was created to finance part of the track relocation,
  • that the McHenry County Conservation District could be subject to pressure from the Crystal Lake area (which has paid upwards of one-fourth of the MCCD taxes, but gotten as close to zilch as is imaginable) to develop Vulcan Lakes, if the city fathers and mothers would agree to allow use by those who not Crystal Lake residents,
  • that I would be happy to help put pressure on the MCCD if the council decided to go that route (I handed out this article),
  • that the one week between the announcement of the consideration of the tax hike and the vote did not allow adequate public input, and
  • that the city council was reminding me of the McHenry County College board approved the baseball stadium without public input.

Chamber of Commerce exec Gary Reece noted that he was happy that Jeff Thorsen had beaten him by 24 votes when he ran for city council.

Reece said that there had not been time for the Chamber to take an official position, but, “Based on the feedback we received from some of our members,” he favored passage.

He waxed eloquent about the extra (he stated that he hoped it was extra) economic development money—the $100,000 referred to above.

Reece even hinted at a new TIF district to build a parking garage Downtown.

But, he concluded,

“Not all of our members are behind this proposal.”

The Carpet One store owner (I didn’t catch his name) at 5186 Northwest Highway in Crystal Lake, who is head of the city’s Economic Development Commission, argued for the tax hike.

“I got a positive response from 6 or 7 members,” he said. “I believe in this tax proposal. I think it should go through.”

Tomorrow, what the council members said.

= = = = =
The pictures of Crystal Lake Mayor Aaron Shepley on top were, from left to right, just before he voted to raise the Crystal Lake sales tax 75% and just afterwards.

The rest of the six-member coalition who supported the tax increase are seen below. On the first line are Dave Goss, Ellen Brady Mueller and Ralph Dawson. Below them are Brett Hopkins and Cathy Ferguson.

Images of one of the many certified letters that Crystal Lake continues to send me about my Freedom of Information requests and a drawing of what the Vulcan Lakes project might look like follow.

Below is Councilman Jeff Thorsen, the only negative vote.

Next is Joe Cramer, the Oak Street resident who spoke against the tax hike.

To the left of my comments is a picture of the Main Street Station Tax Increment Financing district project which will be one of the biggest beneficiaries of relocating the Main Street railroad spur.

Below is a picture of Crystal Lake Chamber of Commerce President Gary Reece.

In the photo credits is one of the slides used to try to justify the 75% sales tax hike.

All images can be enlarged by clicking on them.


Crystal Lake Raises Sales Tax 75% — 6 Comments

  1. Aren’t all those tax-hiking officials Republicans? If so, how can Republicans rail against Democrats as big taxers?

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