McHenry’s Steve Stanek is really disturbed about his city council’s having given a huge tax break to Gary Lang Auto Group. I could re-write his missives, but I’ve decided to let you read them as I did.
Stanek is a Research Fellow at Chicago’s Heartland Institute and Managing Editor of Budget & Tax News, He says he can’t believe how “gullible” city council members were.
McHenry on Monday night committed a huge outrage.
They granted hundreds of thousands of dollars of sales tax “rebates” annually for 20 years to Gary Lang Auto Group.
This will total millions of dollars and could conceivably cover the entire cost of his expansion.
Meanwhile, just a little north of Lang on Route 31 is Buss Ford, which expanded to its new location less than 10 years ago and recently expanded again by adding Lincoln-Mercury, all with no sales tax subsidies.
Here’s a letter I sent to the mayor and city council (have received no response) and to the NW Herald, which has not published the letter but probably will, as they called to confirm it with me. Here’s a link to the NW Herald article. Last I checked there were four comments, all slamming the city’s move.
Stanek’s letter to his council follows:
Dear Mayor Low and City Council Members:
I have just learned the city council is about to consider tax breaks potentially totaling hundreds of thousands of dollars a year for Gary Lang Auto Group.
I cannot state strongly enough my objections to this proposal.
Why not also do this for Buss Ford and Sunnyside Dodge and Extreme Jeep and all the used car dealers? If you do it for them, why not also for every business in the city?
It puts the city council in the position of having a direct interest in seeing the success of Gary Lang, possibly over the success of other car dealers, if for no other reason than to keep the city’s “investment” in Lang looking good.
It will force other businesses and individuals to pay more taxes than they otherwise should pay to subsidize Lang, shifting tax burdens onto the shoulders of smaller businesses and homeowners.
I read the comments from Steve Murgatroyd saying Lang might take his new dealerships elsewhere. What a joke. The expense of opening entirely new facilities elsewhere would be far greater than keeping them where Lang already has land, buildings, equipment, and trained staff. It’s a threat repeated thousands of times around the country by businesspeople none too proud to beg for tax dollars to make them wealthier. It’s almost always an empty threat intended to give cover to the elected officials who give away the money.
If the owner of a small business were to ask for this treatment, the person would be laughed out of city hall. Yet the owner of a big business can beg for tax dollars and be rewarded.
You are elected to represent all the people and businesses in this community equally and fairly. Instead, we have local government playing favorites, saying we will squeeze every nickel we can get from some people and give special breaks to others. This is not good government. If anything it is a reason for cynicism toward government.
It is patently unfair and conflates business decisions with political decisions, making decisions in both realms suspect.
And, here is Stanek’s letter to the Northwest Herald:
To the editor:
McHenry may do the impossible. City officials are considering hundreds of thousands of dollars of sales tax rebates annually for 20 years to Lang Auto Group, which never has and never will pay sales tax.
No retailer pays sales tax. Customers pay it. Retailers collect it and send it to the state, which keeps some and sends the rest to local governments.
At no time does sales tax money belong to Lang. It is impossible to rebate money to someone who never owned it.
A “rebate” to Lang would be a pure gift of the public’s money. This would be unfair to Lang’s competitors and to the public who paid the tax and would have to pay higher taxes to cover the give-away.
If McHenry wants to rebate sales tax collected by Lang, the city should send the money to people who pay it – Lang’s customers.
McHenry, IL 60050