Oak Forest’s bigger sales tax bite ‘never a good thing’
At Style Carpets in Oak Forest, it’s a two-person show, with Lauralee Dove tending to customers while her brother, Garrett, handles the carpet and tile installations.
A recession-induced slump in sales forced them to let go an employee who worked evenings and Saturdays, and they’ve cut back garbage pickups to save money. Some months there’s not enough money coming in to cover all the bills demanding to be paid.
“It’s down to bare bones here,” Lauralee Dove said.
With Oak Forest’s city council approving a 1 percent home-rule sales tax, raising the city’s tax rate on general merchandise to 9.25 percent starting July 1, she’s worried it will hurt not only Style Carpets and other businesses in Oak Forest, but also dissuade other businesses from opening in the city.
“It’s never a good thing when taxes are added or raised,” Dove said.
City officials say they had no other choice, facing a multimillion-dollar drop in revenues the last four years because of the economy.
“This was the last resort,” city finance director Colleen Julian said.
The new tax will apply to “tangible personal property” as well as alcohol, soft drinks and restaurant food, but not services, groceries, prescription drugs or licensed vehicles.
City officials said the tax is expected to generate $1.1 million in annual revenue, allowing Oak Forest to rehire two police officers, a firefighter and two other employees.
Officials said the city has cut full-time staff by 12 percent, while part-time positions have been cut in half.
“You just can’t cut anymore,” Ald. Mark Keating said.
Keating said the council had considered boosting property taxes by 15 percent, but that would have caused commercial businesses’ property taxes to increase by 45 percent.
Bill O’Sullivan, a director at Gaelic Park and an Oak Forest resident, said that while the 1 percent hike on its own isn’t much, the overall effect gives Oak Forest “one of the highest tax rates around.”
He realizes the city has made severe budget cuts to cope with declining revenues, but is concerned the tax increase could hurt Gaelic Park’s business, which already has suffered what he described as a “noticeable” drop due to the economy. Those planning large parties or banquets might consider going elsewhere, O’Sullivan said.
“There are fine banquet places in other towns that we compete with on a regular basis,” he said.
Dove said she understands that cities and villages, like businesses, are being squeezed by an ever-present demand for services as revenues fall, but questions the timing.
“This whole economy is in the Dumpster,” she said. “I don’t think that raising taxes is the answer. There’s got to be another way to do things.”