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Our View: Tax increases have staying power

Passing a tax increase is often easier than rolling one back.

The actions taken by the city councils in DeKalb and Sycamore in recent years are a case in point.

In 2008, both cities were facing budget issues. In DeKalb, there was a budget shortfall of about $520,000. In Sycamore, officials had a $24 million capital improvement plan to expand the sewer treatment plant, build a new water tower and repair city streets and sidewalks.

The aldermen in both cities settled on an identical solution to the problem – increasing taxes. Both raised their tax on gasoline by 2 cents a gallon and upped the local sales tax rate by one-half of one percent.

There was some grumbling in both cities about the measures. In DeKalb, some residents were upset but the council refused to reconsider the tax increases. In Sycamore, Mayor Ken Mundy voted yes to break a 4-4 tie on the council on the gas tax increase. Those increases took effect five years ago this month.

In 2010, the city of Sycamore again faced a budget shortfall of $978,000. The council’s solution again was to up the local sales tax by a half-percent.

When it approved the increase, which took effect three years ago this month, the council included a provision it be reviewed in September 2012. When it was reviewed two years later, the council concluded rolling back the increase simply wasn’t feasible. Declining property values have sapped the city’s tax base and made the revenue essential to balancing the budget.

The Sycamore council will review the tax increase again in September 2015. It seems likely the aldermen at that time will reach the same conclusion – the city’s budget will have included the extra funds for years by then, and trying to cut spending to make up the revenue loss will be difficult. What will be easier is leaving the tax increase in place.

In DeKalb, the city is giving out raises and staffing new departments to inspect rental housing, but we have yet to hear any of the city’s leaders discuss any plan for rolling back the tax increases, which appear here to stay.

As it has gone with local tax increases, many fear it also will go with the state income tax increase, which raised the personal income tax rate from 3 percent to 5 percent in 2010.

The tax is supposed to be rolled back to 3.75 percent in 2015, but it seems only a matter of time before lawmakers decide it will simply be too difficult to cut spending enough to keep their promise.

Too often, tax increases – even when they’re pitched as “temporary” – end up being forever.

• Note to readers: This editorial was corrected to reflect that Sycamore Mayor Ken Mundy voted to break a tie on the gas tax increase.

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