Souther Ill. Property Tax Rates

Southern Illinois’ wide range of property taxesMAY 2, 2017 AT 4:25 PMfrom Illinois Policy | Illinois' comeback story starts here by Brendan Bakala

When it comes to property taxes in southern Illinois, homeowners face a wide variety of rates. Though not as expensive as the record-high property tax rates in the greater Chicago area, property taxes are still a significant expense for many homeowners in southern Illinois.

Jackson County, home to Southern Illinois University, Carbondale, has the highest property taxes among the southernmost counties in Illinois, with nearly $2,000 a year in annual median property taxes paid, according to data from the Tax Foundation. Statewide, Jackson County is in the top 50 for median property taxes paid, ranking 47 out of Illinois’ 102 counties.

However, southern Illinois is also home to the state’s lowest property taxes. Hardin County ranks last in the amount of annual median property taxes paid, at $580.

A statewide property tax freeze would alleviate pressure on homeowners in Jackson County and other areas where property taxes are high. And polling suggests that Illinoisans largely agree that property taxes are too costly. A poll commissioned by the Illinois Policy Institute and conducted in February and March by Fabrizio, Lee & Associates shows that 70 percent of Illinoisans surveyed think property taxes are too high. This should come as no surprise: Illinois has some of the highestproperty taxes in the nation, and those taxes are driving people across the state to leave.

A statewide freeze would also help mitigate the out-migration crisis in southern Illinois and across the state. From July 2015 to July 2016, 89 of Illinois’ 102 counties saw their populations shrink, including 15 of southern Illinois’ 17 counties. This population loss is a symptom of Illinois’ high-tax environment and lack of opportunity.

Cost drivers behind Illinois’ high property taxes

One of the chief drivers of property taxes is the amount of local government in Illinois. Illinois has nearly 7,000 units of local government across the state – the most in the entire country and more than Wisconsin and Indiana combined. This high number of local governments drives up costs and is one of the main reasons property taxes are so high.

Unfortunately, consolidating government entities in Illinois can be more difficult than amending the Illinois Constitution. The fact that Springfield pumps hundreds of millions of dollars in state taxpayer dollars to local government also helps inflate the local spending that keeps property taxes high. One of the sources fueling the overspending at the local level is the Local Government Distributive Fund, or LGDF. This fund takes state dollars and gives them to local governments, based not on need, but on a pro rata share of the state’s population. And while using state money to fund local projects may sound like a good deal for local residents, that’s not the case. Once LGDF funds an expansion of local government, it is local residents and homeowners who are on the hook for further costs for items initially paid for by LGDF, including additional employee and pension costs.

Despite the fact that the LGDF increases spending that drives up property taxes, state representatives passed House Bill 278, a measure that proposes to increase the percentage of net state individual and corporate income tax revenue that would go into the LGDF. HB 278 appears to have stalled in the Illinois Senate. However, if enacted, the bill would transfer even more state tax money to local governments to spend, ultimately contributing to higher costs for local homeowners.

Lawmakers should look for real solutions to Illinois’ problems. A statewide property tax freeze and legislation easing the requirements for local government consolidation would be a good start.

Prepare ye for "sweet" tax

https://smallbiztrends.com/2017/05/can-small-business-prepare-next-soda-tax.html

Government officials in places like Philadelphia and Seattle think the new revenue from a soda tax is sweet, but small businesses are the ones that will absorb the cost and they’ve soured on the idea.

The COO of Canada Dry Delaware Valley recently claimed the tax was responsible for a 45 percent drop in sales. And there were plans to lay off 20 percent of the workforce.

In Philadelphia, the so-called “so tax” puts a 1.5 cent tax on every ounce of soda sold. For a 20-ounce drink, that’s another 30 cents to cover the tax. A traditional 12-pack of soda cans would cost another $2.16 to cover the tax.

For restaurants or stores that sell a lot of soda, you can see how the costs will quickly add up. A small business has to decide whether to raise the cost of items or absorb the cost of the tax, or find a balance. Whether they do one or the other, it seems the soda tax leads to one certainty.

It’s a job killer, Brown’s Super Stores CEO recently told Bloomberg. The company recently eliminated 280 jobs because of the tax.

Why Tax?

The governments imposing the tax suggest it’s to improve public health. Sure, unchecked consumption of sugary drinks like soda can lead to obesity and other health problems. But is it worth targeting businesses who sell these products?

More than likely, it’s about revenue. As noted above, it adds up quickly.

Philadelphia’s tax hopes to generate $91 million in revenue annually for the city. It’s been on the books since January 1, when it generated $5.9 million. The Philadelphia tax includes not only soft drinks, but non-alcoholic beverages, syrups and other concentrates with high sugar content.

What Can Small Businesses Do to Prepare for Another Soda Tax?

Maybe your business is in a city where a soda tax is being bandied about by politicians. Or maybe there’s a similar tax in your municipality that targets a product you sell.

In Seattle, the mayor wants $18 million from a soda tax to go to public education.

Jennifer Cue, the CEO of Jones Soda, Co., in Seattle, offered some suggestions on how small business can prepare for a soda tax when she spoke recently with Small Business Trends.

How to Prepare for a Soda Tax

Positioning  

Cue suggests certain branding might be good to categorize your company in such a way to soften the impact.  For example, Jones Soda has positioned itself as a high end product — something to celebrate with on special occasions and in moderation.

“The evolution of the tax in various markets has made soda a bad four letter word but we have always been a premium product,” she says adding that their business model is set up with a benchmark goal of having every American drink one of their sodas a year.

It’s that distinction that separates Jones Soda’s branding efforts from some of the other bigger players in the space that are aiming for more regular and routine use. Other small businesses can brand themselves in a similar high end way to offset the higher costs that get passed along to consumers from any taxes.

A social media campaign that creates a niche persona is one idea.

Packaging

Understanding how the tax is applied and how your small business can justify the cost through packaging is another important aspect to look at. Cue explains this perspective for her company and their use of glass bottles.

“In this case, the soda tax is being applied on the ounces. So it’s one cent an ounce for a 12 ounce can or a 12 ounce glass bottle. The impact is much lower on a premium soda.”

Jones Soda promotes the bottles as a part of the premium experience. This type of unique  packaging can be used for other small businesses with sugary ingredients as a way to soften the increased cost.

Engaging

Getting engaged and stating your case to local governments is another way to prepare for any soda tax that might be forthcoming. Cue explains:

“We’ve gotten into and learned a lot more about how this has come about. We’ve had some meetings with the council. At the end of the day, we learned there wasn’t really an understanding of the impact on small business.”

She says one of the issue is these taxes seem to target only one industry although sugar is a big ingredient in many products. Of course, Cue also suggests that small businesses facing a soda pop tax can take the most obvious course of action and lower their sugar content.

“We’ve brought the sugar content down over the years as tastes change and we’ll continue to do that,” she says.

Soda Photo via Shutterstock