StoryImage( ‘/Images/Story//Auto-img-11763134883588.jpg’, ‘Photo by Stuart R. Wahlin’, ‘The outcome of the April 17 sales tax referendum weighs heavily on Rockfords streets.‘);
With the April 17 referendum fast approaching, campaigns, both for and against the proposed 1 percentage point sales tax increase, are shifting into high gear in an effort to impassion Rockford residents to get out and vote in a season with a typically low turnout.
The sales tax increase would raise an estimated $16 million a year to fund infrastructure improvements until it expires in five years.
The referendum asks: Shall the City of Rockford, Illinois impose a sales tax, for expenditure on public infrastructure, of 1% of gross receipts on persons engaged in the business of selling or transferring personal property other than food, medicine and titled property, at retail or incidental to the sale of service, until December 31, 2012?
Some have argued the language to be misleading, so it should be noted some food would be subject to the 9.25 percent tax rate. This would include restaurant dining, as well as prepared food from grocery stores.
Rockfords roads and bridges have only continued to deteriorate in the year since a similar road referendum failed, widening the cracks in the debate over how the problem would best be solved.
In the November 2006 elections, a last-minute ad campaign, fueled in large part by Road Ranger LLC President and co-owner Dan Arnold, caught city officials off guard and was instrumental in the referendums defeat.
This year, proponents of the sales tax increase have come prepared for the long haul.
Mayor Larry Morrissey (I) has credited a broad-based coalition of supporters for getting the word out this time around. The Citizens for Rebuilding Rockford have gathered more than 300 volunteers in addition to numerous endorsements and sizable contributions to counter the Winnebago County Taxpayer Advocates (WCTA), who are once again fighting the 1 percentage point sales tax increase with equal rigor.
Brian Brown, chairman of Citizens for Rebuilding Rockford and owner of Atlanta Bread Company, said more community discussion, better media coverage, phone polls, canvassing and yard signs are all assets the campaign Paving the Way to better roads did not have the year before.
Last year was just city officials that were trying to get the word out, Brown indicated. And there were only a few of those at that.
What were finding is, compared to last year, Brown summarized, the information wasnt out there.
Although maintaining voters have already said no to the full 1 percentage point increase, the WCTA have also had to adjust their plan of attack, knowing they will be met head-on by supporters of the referendum.
It was a lot harder to get people to speak out publicly against the tax after we were blamed and vilified after last years vote, explained WCTA President and Road Ranger Vice President Tim Emert. We had a lot of businesses say that they had zoning variances in front of the city and were afraid they would be denied if they spoke out against the tax.
In Rockford, road improvements have historically been funded by the issuance of bonds against property taxes. As a result, Rockford has the highest property taxes in the state for a city of more than 70,000.
For this reason, supporters of the referendum are holding firm to the sales tax approach to rebuilding Rockford roads.
The old way weve been doing it, through an annual referendum that issues bonds against property taxes, has been inadequate, Brown stated. It doesnt raise enough money to get the work done. The bonds raise anywhere from 6 to 8 million dollars a year, and the deterioration of the roads is going a lot faster than that. The citys never had enough money to fix the ongoing problem.
Should the referendum pass, the city will have access to the matching funds essential to leveraging state and federal dollars for road and bridge projects.
Brown argued bonds are holding property taxes hostage and noted the second-highest tax rate in the state is about half of that in Rockford. By moving away from the bond system, Brown said, property tax rates will go down by about 20 cents over the next five years.
Improvements related to passage of the referendum are expected to result in higher assessments, so it is unclear whether property owners will see significant savings on their tax bills.
The WCTA does not dispute the need to steer away from bonds, but argue a full percentage point increase is simply too high of a toll to pay.
The tax is OK, Emert asserted. Its the amount thats wrong. Riverwalks and white water rafting is not a priority we should be focusing on.
Such projects fall under the legal definition of infrastructure.
Mayor Morrissey has promised no funds from the sales tax increase will be used for the Riverwalk project, which would instead be paid for in part by the citys approximately $4.4 million annual share of Motor Fuel Tax (MFT) receipts. The MFT funds are often used toward road improvements.
Infrastructure can mean everything from whitewater rapids to rebuilding the Barber-Coleman Building, Emert stressed. And when the MetroCentre needs money, guess where that will come from.
Emert argued the citys proposed 2007-2011 Capital Improvements Plan (CIP) appropriates only $2.35 million for street maintenance over five years, while allotting $3.5 million for the Riverwalk project.
While often accused of not having a better plan to offer, the WCTA believes to have found an alternative to the full percentage point sales tax increase.
We believe very strongly that a half-percent would provide more than enough money to accomplish road and bridge repairs, Emert proposed, while also suggesting a quarter-percent reduction in the county jail tax. A half-percentage point increase would generate 8 million. Couple that with the 4.5 million from the MFT, and roll back the budget to 2004 levels, and you would have over 16 million for repairs.
The proposed sales tax increase has ignited much debate about whether consumers will take their business elsewhere.
With time being a precious commodity in the modern age, Brown said he believes shoppers value convenience over saving a couple dollars, and anticipates the increase would not change most peoples habits.
Therell be a few people thatll probably head to other places, Brown conceded. Maybe theyll do it once or twice. By the time they have to pay the extra amount in the gas they really wind up paying more money to do that.
Winnebago County has one of the highest surpluses of any county in Illinois, said Brown, citing a 2006 Northern Illinois University study. What that says is theres a lot of loyalty to the stores and the retail in the area.
Proponents say the increase to 9.25 percent is in line with sales tax rates in Chicago and the northwest suburbs.
WCTA supporters say restaurants and businesses dealing in high-dollar items would lose their competitive edge as a result of the tax increase.
Ironically, its the big-ticket items that provide the city with a big piece of its sales tax revenue, Emert indicated. You have to sell a lot of toothbrushes to make up for $100,000 in building materials for a new home.
The WCTA does not deny some businesses may feel a pinch, but argue the increase is for the greater good.
I think they have a total of, last I checked, about 11 retail businesses that are part of their advocacy association, Brown said of the WCTAs opposition to the 1 percentage point sales tax increase. I guess their feeling is that they could get hurt by that.
Despite the concerns of opponents, Brown believes the increase simply makes financial sense for the city.
If we cant get this referendum passed, there is no road program for another year, and our roads will continue to deteriorate, Brown stated, noting 35 percent of the revenues raised would be borne by out-of-towners. This, in our opinion, is the right solution.
The Rockford City Council has become much more active this year in helping to sell the referendum, without conditions. As an apparent si
gn of goodwill, aldermen did away with the citys long-standing vehicle sticker tax Feb. 5. In a surprise move March 19, the Council voted to trim $1 million from 2007 departmental operating budgets for use toward improving local streets throughout Rockfords 14 wards.
The five-year sunset clause, which Brown calls a report card, is also hoped to earn the trust of residents who will make their way along crumbling roads April 17 to cast their votes.
Emert, however, is confident the Morrissey administration will once again be met with a resounding no when the ballots are counted.
I think those that are politically active will turn out, Emert predicted. The majority of those voters were against the tax last time.
If the referendum passes, the increase wouldnt be collected by the Illinois Department of Revenue until January 2008. However, state Sen. Dave Syverson (R-34) is working on a bill in Springfield that would allow the funds to start being collected as early as this summer to give some gas to much-needed road projects.
In the end, only money will fill the deepening pothole that is Rockfords road dilemma. Each side in the debate will undoubtedly spend enormous sums of it to be in the Winners Circle come April 17, when Rockford will decide whether to cautiously proceed or to slam on the brakes and head back to the starting line.
from the April 11-17, 2007, issue