Kane Co. primary ballots may ask voters about potential retail tax

Kane County officials may test local voters' reaction to the idea of creating a new special county retailers occupation tax on June 28 primary election ballots.

The tax could raise $26.5 million in new money for the county. But it would make some of the most common purchases more expensive.

County board members raised the idea of a retail occupation tax last fall when seeking to balance the current 2022 budget. They scrapped the idea of any tax increases in favor of spending down savings and using federal COVID-19 relief funds to zero out what began as a $16 million deficit.

Those federal funds won't last forever. The idea of increasing property taxes, raising the county gas tax, and the retailers occupation tax are all back on the table to address future expected budget deficits. Of those, the retail occupation tax is the only idea that would need voter approval.

The county board will consider two possible rates for the tax - a 0.25% tax and a 0.50% tax. The 0.50% tax would net the county about $26.5 million in new money. The impact to local shoppers would be an additional 50-cent tax for every $100 worth of goods purchased.

Not every retail item would be subject to the tax. Cars, groceries and medicine would not see any additional tax applied. However, a new retailers occupation tax would make it more expensive to dine at local restaurants, shop at department stores and buy gas.

County officials can use the money generated by the new tax for limited purposes that must be designated in advance of putting the tax in place. All other counties in Illinois that have such a tax dedicate the funds generated for public safety expenses. Mental health, transportation and public building expenses are also possible uses of the funds. However, the money can only go to one of those functions, not all four.

County public safety officials have repeatedly stated a need for more income with the end of cash bail and the imposition of new costs stemming from the state's police reform efforts. Last year, county public safety officials said they needed a $5 million budget increase to address those issues.

Mental health funding is a competing issue that's gained more attention during the COVID-19 pandemic. A county health department survey of 1,500 residents showed 45% of respondents ranked mental health as the No. 1 health priority. Substance abuse is one facet of mental health. The county logged 419 overdoses last year, more than one overdose a day.

Presentations this week also showed a shortfall of $190 million in the transportation division's list of 2021-2025 projects. Likewise, 27 buildings the county owns (some dating back to the 1800s) need $18 million in maintenance.

The county board will have to prioritize those needs to target the funds to a single expense category if the retailers' occupation tax becomes a reality. However, any new money for any of those categories may free up some existing dollars to be moved to those other budgetary needs.

First comes the mandatory voter approval. Board members may test the water by putting a nonbinding advisory question on the June 28 ballot. That would allow voters to weigh in on such a tax without any new tax being created. It also would allow county board members, who are all up for reelection this year, to see how supporting such a new tax might impact their chances of keeping their jobs.

If voters say they'd support the new tax, the question would come back as a binding proposition on the November ballot.