The controversial 1% increase in Cook County’s sales tax will stand after the Board of Commissioners failed last week to overturn board President Todd Stroger’s veto of a tax repeal.
Opponents of the tax increase enacted last year failed to muster the 14 votes needed to override the veto. Eleven of the 17 commissioners voted to override. Commissioners in a surprise move this month voted 12 to 3 to repeal the tax.
Some commissioners who voted for the tax hike last year switched to voting for repeal, saying they were disappointed that Stroger has not done more to cut patronage and spending.
Critics of the tax increase say statistics show that suburban communities bordering counties with lower tax rates have seen retail sales decline faster than in other areas of the county.
The controversial increase lifted the Chicago-area sales tax to the highest in the nation, at 10.25%. Stroger two weeks ago vetoed the repeal, warning that the county needs the tax revenue to maintain services.
The increase was expected to generate $300 million annually. Rating agency analysts were watching the dispute closely, and some warned that a repeal could possibly affect the county’s mid-double-A ratings on $3 billion of general obligation debt.
With the tax repeal issue resolved, the county is expected to enter the market next month with a long-planned GO sale to raise roughly $250 million of new money for capital projects. Loop Capital Markets LLC is senior manager, and Samuel R. Ramirez & Co. is co-senior manager. Citi, SBK Brooks Investment Corp., Siebert Brandford Shank & Co., and William Blair and Co. are co-managers.
Mesirow Financial Inc. is lead financial adviser, and A.C. Advisory Inc. and Davis Financial are co-financial advisers. Chapman and Cutler LLP is bond counsel, and Perkins Cole LLP is co-bond counsel.