Illinois Valley Times

Granville residents are facing a 1 percent increase in their sales tax due to the village's decision to enforce a business district tax impacting the entire village.

The increase in the sales tax rate, which jumped from 6.25 to 7.25 percent as of Jan. 1 in Granville, is not unique to this small Putnam County village approximately 100 miles southwest of Chicago, nor is Granville the only municipality to experience a sales tax rate increase. Many lawmakers across Illinois are cashing in on their newly gained ability to raise rates with the change in the calendar year.

According to an informational bulletin from the state of Illinois, 20 business districts across 17 counties across the Land of Lincoln have been hit with sales tax increases, ranging from small entities like Granville all the way up to larger locales.

Granville’s is not the most extreme case, as Chicago currently imposes the highest sales tax of any U.S. city, according to Illinois Policy. The Windy City’s whopping 10.25 percent sales tax – aided by Cook County officials’ actions dating to July 2016 – contributes heavily to the overall tax burden for Illinois and, consequently, its precariously high position as the nation’s fifth highest-taxed state overall.

Nor is Granville’s the highest sales tax rate outside Chicago; East Dundee bears that distinction, with its Christina Drive Business Development District witnessing a jump from 9.5 to 9.75 percent.

Nevertheless, the sales tax jump is noticeable.

While most of the adverse publicity circulating about Illinois’ sky-high taxes has focused on property taxes, it appears that changes in sales tax rates is gaining ground and may prove to be as critical an area, based on figures released by the state.

Illinois Policy phrased the phenomenon a “New Year’s cash grab,” calling the most recent rate hikes in an ongoing spate of tax increases slamming state residents as “tax hikes that have left many Illinois residents feeling as though their pockets have been picked.”

According to the Illinois Governor’s 2017 Budget Summary, Illinois’ tax revenue leans strongly on both income tax and sales tax, with figures revealing that more than 70 percent of the state’s total intake derives from income tax, netting approximately $15.8 billion (47 percent), and sales tax, bringing in approximately $8 billion (24 percent).

Illinois Policy analysts estimated recently that the state will collect over $33 billion in 2017. That figure is $3 billion less than the maximum of $36 billion Illinois took in during its temporary four-year income tax hike from 3 to 5 percent, launched in 2011. It will spend, however, $5 billion more than it nets, continuing to send the spending cycle into a headlong spin.

“Middle- and working-class Illinoisans should not be forced to pay for the financial bungling of local and state government,” Illinois Policy said. “Rather than raise taxes that will hurt already cash-strapped residents, these 20 municipalities should look for ways to fix their budgetary issues without going back to taxpayers.”

Whether increasing sales taxes will help substantially at the local level remains to be seen; but a couple of conclusions emerge. First, it’s simply “never enough,” according to Illinois Policy and secondly, the middle class appears to be hardest hit with these incremental but significant changes, continuing to pay at least slightly disproportionately to their ability to support their municipalities.

“Any way you measure it, Illinois governments already collect more than enough money from taxpayers,” Illinois Policy said. “Illinoisans pay the highest property taxes in the nation, and when total state and local taxes are tallied up, Illinoisans pay the fifth most in the nation. Illinoisans can’t afford to pay more taxes.”