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DeNeal: Harrisburg sales tax increase evidence of 'Illinois tax paradox'

updated: 9/23/2020 2:01 PM

You may have heard of the "birthday paradox," a concept in probability theory. In a nutshell, even though there are 366 possibilities (don't forget Feb. 29), if you have a room with 23 people in it, there is a 50 percent chance that two of them will share a birthday. It's an interesting tidbit, but I only share it to compare the number of people who look favorably on tax increases. I'd guess that in a room of 23 people, you might have one person giddy with excitement over the thought of forking over more of their hard-earned money for the privilege of purchasing something, living where they want to live or just generally existing.

Taxes are never popular, although living in Illinois a person might think it's a statewide hobby.

On Thursday, Sept. 17, the city of Harrisburg passed a 3/4 of 1 percent sales tax to create the Harrisburg Business District. It means that, after it goes into effect Jan. 1, 2021, most things you buy at retail locations will have an 8.75 percent sales tax in the city. Until the end of the year, it's still a flat 8 percent.

By state statute, the money raised from the sales tax increase can't be spent on a whim. The city already has several projects in mind designed to improve Harrisburg.

The first project on the list is the demolition of the old Malan Junior High School building. The building long has been in a state of disrepair, and gradually is getting worse. Last Thursday, Fire Chief John Gunning said more windows have been broken in one area, and apparently more people have been sneaking into the building unauthorized. In addition, the roof over the auditorium area is in terrible shape, and likely will fall this winter. There are multiple safety issues.

The city didn't necessarily want to acquire that property, but it had not been maintained by previous property owners. What the city wants to do is tear it down, rehab the property and then be able to use that property for something else, possibly selling it to people who may build a home or a business there. That would at least get it back on property tax rolls.

The problem is, of course, Harrisburg's population is dwindling, as is the rest of Illinois. That means there are fewer dollars available each year that can help fund such projects.

Rather than complain about the state of things and do nothing, though, the council did something. The four members present voted to create this business district by, yes, raising the tax rate.

I know some of the city commissioners better than others, but I'm pretty sure raising the sales tax was the last thing any of them wanted to do.

It's a difficult situation. Do you risk increasing a tax and then being voted out of office the next election, or do you do nothing and get voted out because you didn't do anything to improve the city?

The problem with increasing sales tax rates is, it becomes a slippery slope. Now, it will be 8.75 percent, which is still lower than Marion and Carbondale. Still, I can't help but think it will be a short matter of time before we see another quarter percent sales tax increase that will get it up to 9 percent.

However, with the city's shrinking population, it is unrealistic to think that the city will have the resources to make public improvements that might attract more people and businesses instead of repel them. At least some of that money will come from people passing through instead of solely being the burden of those who live in town.

But, it will hit people on fixed incomes a little harder. In the end, there are no great options for a small southern Illinois town trying to revitalize itself.

It seems fitting, then, that in Illinois the only way to fight population loss from people fleeing high taxes is to raise taxes even more.

And that, folks, is the "Illinois tax paradox."