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Gov. Pat Quinn's proposed sales tax bottled up in fees, coffee, sweet tea, could leave sour taste: State, local governments pile on 'nickel and dime'...
[March 22, 2009]

Gov. Pat Quinn's proposed sales tax bottled up in fees, coffee, sweet tea, could leave sour taste: State, local governments pile on 'nickel and dime'...

(Chicago Tribune Via Acquire Media NewsEdge) Mar. 22--Buried deep within the massive budget proposal Gov. Pat Quinn presented last week to lawmakers was a caffeinated jolt to the bottled tea and Frappuccino crowd.

Quinn wants to apply the state's sales tax on soft drinks to the coffee and sweetened tea products in grocery stores, adding a quarter for the state treasury for every $5 six-pack of sweet green tea.

While his proposal for a 50 percent increase in the income tax got the headlines, the tea and coffee tax is among a pocketful of nickel-and-dime tax increases the governor is seeking in a comprehensive effort to overcome the state's looming $11.5 billion budget deficit. He also favors higher fees for driver's licenses, license plates, hunting and fishing licenses, cigarettes, tickets to the State Fair and even adding the state's sales tax to some shampoo and personal hygiene products.

But the new Democratic governor, just more than seven weeks on the job, is not alone in nicking the Illinois taxpayer. From the highest-in-the-nation Chicago sales tax to a host of new and bigger fees being imposed by a variety of municipalities, the public is being increasingly tapped for dollars in purposely quiet, understated ways.

"It's partly hidden taxes," Dan McMillen, an economics professor at the University of Illinois at Urbana-Champaign, said of the fee frenzy. "When you pay a property tax bill all at once, it's a lot of money. When you pay income tax, it's a lot of money. Fees you spread through the year and you don't even know how much it adds up to." Like threats to increase the income tax at the state level, efforts to raise property taxes levied by municipalities and schools get the most attention and stir the most public outcry. Many cities, villages and school districts have created fees or increased existing ones to boost budgets. At the same time, the bad economy leads to a drop in government revenue from things like the sales tax and fees from homes sales -- which in turn prompts government to find even more ways to make people pay.

Chicagoans have already seen more than their share of increases, from the parking tax at garages and lots, residential parking permits for guests, increases in parking meter fees as part of the city's privatization efforts and a doubling of fines for overdue library books.

Metra and CTA riders are being threatened once again with service cuts and fare increases despite recent fare hikes and a dramatic growth in ridership fueled by the high gas prices last summer.

Meanwhile, suburban Oak Park has been overhauling its entire fee structure as part of an effort to raise new dollars. Evergreen Park is among a host of communities that has increased its water and sewer rates. Downstate Bloomington is one of many towns examining higher garbage disposal fees. And school districts across the state are evaluating increases in student fees to offset potential property-tax increases.

Perhaps taking a cue from the man he claims is a distant cousin, Chicago Mayor Richard Daley, Homer Glen Mayor Jim Daley recently pushed through a 1 percent sales tax to pay for road construction in the growing southwest suburb.

"There's been a significant growth in the amount of fee income that is generated by municipalities," said James Nowlan, senior fellow with the Institute of Government and Public Affairs at the University of Illinois at Urbana-Champaign, a former lawmaker and past president of the Taxpayers' Federation of Illinois.

"They have been aggressive in seeking new sources of revenue rather than always going to the property tax, and so you do see increase in fees," he said. "Just about anything that moves could be taxed as a fee." Only three weeks before he unveiled his budget to lawmakers, Quinn said in a WGN-AM 720 interview, "Illinois has an extreme reliance on nickel-and-dime taxes that add up to huge amounts of money that aren't based on ability to pay. They hurt average people very much, people who live from check to check." Yet Quinn wasn't above adding to the list in his budget message even though many of the levies are regressive, in that they affect everyone regardless of income.

Asked about the tax on bottled teas and coffees, Quinn said Friday it was a matter of eliminating an exemption from the soft drink tax rather than trying to raise a lot of revenue. He acknowledged it was "pretty small potatoes ... but you've got to do that when you have a tough time." Before Quinn took over for the impeached Rod Blagojevich in January, the state was already getting ready to tack a $1 increase on the $78 annual license plate fee on July 1 to help pay for new police cars. Quinn now wants to hike the plate fee an additional $20, double the driver's license fee to $20 and raise the car title transfer fee by $40 to $105 to pay for a massive road and bridge construction plan.

Quinn also backs a legislative proposal for a $1 increase in the 98-cent per-pack state cigarette tax over two years. Though the total tax of $1.98 would be lower than more than a dozen other states, when the state's current levy is combined with Cook County's $2 tax and Chicago's 68-cent tax, the taxes on cigarettes are higher than any other state.

But there is a certain irony to Quinn's push to tack the state sales tax on sweetened tea -- one that brings his political career from political outsider to insider full circle.

Quinn's birthday is the same as the anniversary of the Boston Tea Party. Three decades ago, he railed at a legislative pay raise by encouraging voters to send used tea bags to the governor's office. At the time, he told Illinois Issues magazine the stunt, which helped launch his career as a political activist, "was a perfect way to get citizens interested in government again and feel they could make a difference." [email protected] [email protected] To see more of the Chicago Tribune, or to subscribe to the newspaper, go to

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