Mayor Morrissey scores second sales tax victory

StoryImage( ‘/Images/Story//Auto-img-118366532329884.jpg’, ‘Photo by Stuart R. Wahlin’, ‘Mayor Larry Morrissey (I) announces the collecting of the city sales-tax increase to begin July 1.‘);
StoryImage( ‘/Images/Story//Auto-img-1183665380985.jpg’, ‘Photo by Stuart R. Wahlin’, ‘City retailers were sent notices of the early sales tax collection to begin 6 months early.‘);

Following Illinois Gov. Rod Blagojevich’s (D) veto of Senate Bill 1395 June 22, Rockford leaders persevered in the week that followed to give Rockford a head start in collecting the 1 percentage point sales tax increase approved by referendum in April. As of July 1, Rockford’s sales tax rate jumped from 7.25 to 8.25 percent.

A jubilant Mayor Larry Morrissey (I) proclaimed: “Congratulations, Rockford, Illinois. We got it done.”

With the governor’s last-minute veto, it appeared unlikely the Morrissey administration would be able to pull off the upset, unsure if the matter would even be brought before the General Assembly in time. After success in the Senate, 43-3, the override required a minimum of 71 votes in the Illinois House. The House voted 74-13 to defeat Blagojevich’s veto.

Down to the wire, on the House’s last day before a scheduled vacation, many were doubtful enough lawmakers would even be present to override the veto.

“The vote count was in doubt throughout the day, until the final number came in,” Morrissey said. “We had a lot of people who weren’t in the House of Representatives today, and so every vote counted.”

State Rep. Chuck Jefferson (D-67), who was a co-sponsor in the House, expressed dissatisfaction with his Democratic governor’s veto.

“The governor could have listened to what the people of Rockford wanted,” Jefferson said. “There was no reason for the governor to wait until the last minute to veto this bill.”

Despite Blagojevich’s opposition to the sales tax increase, Morrissey was appreciative the veto came when it did a week prior.

“He could have sat on it past July 1, and we wouldn’t have had this opportunity,” Morrissey pointed out. “So, although we disagreed with him on his underlying decision, we’re glad he made the decision when he did, because it gave us that opportunity to override his veto.”

The governor, who favors a Gross Receipts Tax (GRT), calls sales taxes regressive and distanced himself from Rockford’s local tax. Morrissey alleged such politics can be problematic for non-home rule communities like Rockford.

“A lot of times our local issues get caught up in statewide issues,” Morrissey explained. “It’s unfortunate that a local issue like ours ends up getting tied up into that mess, but we got it done.”

Responding to arguments Rockford lacks clout at the Capitol, Morrissey indicated: “I’m here to tell you, whatever we have, we multiply it tenfold when we work together. Whatever we have when we’re willing to set aside differences for things that are important to this community, we can achieve great things.

“We need to have sustainable, consistent lobbying efforts,” the mayor added. “Certainly we’ll do our part as a staff, but I think in the future, we wanna work with our council and hopefully get a more permanent lobbying presence in Springfield.”

Morrissey credits cooperation among Democrats, Republicans and Independents for allowing the early collection of the sales tax increase to move ahead.

With the governor’s veto overridden just two days before the increase was to take effect, city leaders faced a whole new challenge—getting the word out to retailers in time.

The Illinois Department of Revenue supplied Rockford Legal Director Patrick Hayes with nearly 6,200 bulletins to inform Rockford businesses of the increase. With a trunk-load of the notices, Hayes made his way back to Rockford from Springfield Friday afternoon to ensure Saturday delivery of the bulletins to retailers by mail.

Hayes noted, “Little did we know, when Mayor Morrissey lobbied last year to keep our local sorting facility here in Rockford, how precious that would be to us so soon as a city.”

Morrissey had considered a late start for the July 1 tax increase because of the short notice.

“From our standpoint, five-and-a-half months is better than nothing if we had to wait,” Morrissey said, “but really that was an issue we didn’t have to get to, because we were able to take action, get it done this morning and provide notices in the mail.”

One Rockford business owner, Robert Dahlberg, confirmed he received the notice June 30. Despite the one-day notice, his store was ready for the new rate July 1.

Jim Phelps, owner of Phoenix Traders, indicated July 3 he still had not received the notice, but had heard about the increase and was able to make the adjustment on time.

“It wasn’t a big deal for me,” Phelps said of his necessary computer update. “It took me probably five seconds.”

While most retailers made the change to their cash registers with relative ease, the transition wasn’t entirely seamless.

As late as July 3, at least one major chain store at CherryVale Mall in Cherry Valley is reported to have erroneously been charging the additional 1 percentage point meant only to be collected by Rockford merchants.

The error is said to have occurred at the corporate level and has since been corrected.

Because the mall has a Rockford mailing address, CherryVale merchants may have received copies of the notice informing them to levy the increase effective July 1.

Cherry Valley Village Administrator David Nord, however, said he informed mall management Rockford’s sales tax increase is not to be levied at CherryVale, regardless of mailing address.

Sales tax assessed at CherryVale Mall does not contribute to Rockford sales tax revenues.

Hayes told WNTA’s Ken Decoster it’s possible some mall businesses may have inaccurately filed state tax forms under Rockford’s location code. If so, those proprietors would have received a copy of the notice.

“If they were mailed a notice,” Hayes supposed, “it was because those retail entities have been filing an incorrect return.”

In addition to relying on the media to get the word out, city leaders also made phone calls and sent e-mails to inform retailers of the change.

An estimated $8 million will be raised through the increase in the last six months of 2007. Rockford will see its first installment of the tax revenues in October and put the money to work.

Morrissey argued voters approved the increase because they understand the need to rebuild the city’s crumbling infrastructure.

“We don’t wanna miss a construction season,” Morrissey asserted. “Why wait until next year if we can get moving right now?”

If the administration had been unsuccessful in getting the early collection passed, the tax wouldn’t have started being collected until Jan. 1, and Rockford wouldn’t see a penny of it until April 2008.

$3.45 million has been allocated for the Neighborhood Streets Program in 2007, according to Capital Program Manager Patrick Zuroske.

Zuroske reported local roads will be a priority for the City Council immediately, and projects would go out for bids within two or three weeks. Zuroske added that’s just the start.

“2008 is gonna be a really banner year for us,” Zuroske affirmed. “We have a whole host of programs and projects that we really look forward to kicking off.”

Zuroske said although development of the riverwalk will move forward, no sales tax revenues will be used for the project.

City Engineer Brad Moberg indicated road construction is expected to begin in August. The work in 2007 will focus mainly on resurfacing streets and alleys, according to Moberg.

Although conceding luck was a factor, Morrissey argued cooperation was the key to making the expedited collection of the tax increase a reality.

“I guess in football, they sometimes refer to it as the 2-minute drill or the Hail Mary pass,” Morrissey observed. “Sometimes you call it luck, but I believe communities that work hard, communities that are willing to lead boldly to work together—they make their luck happen for them.”

Retailers who may still have questions about the increase are urged to e-mail Patrick Hayes at

from the July 5-10, 2007, issue

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