Sales Tax Holiday — Will Be No Holiday For Taxpayers And Human Service Providers
State Sen. Dave Syverson (R-Rockford) is urging Gov. Pat Quinn to reverse his support for a pending new “sales tax holiday” on clothing and school supplies which will actually end up costing taxpayers in the long run.
This legislation is nothing more than election year pandering,” Syverson warned. “The state got into its current financial mess by promising more than it could ever deliver and this is another instance of that. In reality, this plan will result in very little savings for area families while costing the state dearly over the long-term.”
The Senator disputed claims by the Governor and other supporters of the legislation (Senate Bill 3658) who say it will help stimulate the economy.
“We all have seen those ‘too good to be true’ vacation deals where, when you read the fine print, you realize you are being taken,” Syverson said. “This is what this legislation is all about. In reality, consumers will still pay the 1.25 percent local/municipal portion of the sales tax and, if a family spends $200 on school supplies, the actual savings they will receive amounts to roughly $10.”
While the savings to families would be small, Syverson warned that the cost to taxpayers will be much, much higher.
“This program will cost the state $40 to $60 million at a time when Illinois faces a multi-billion dollar deficit and $6 billion in unpaid bills,”
Syverson said. “If the Governor truly wants to help area families and taxpayers, he would direct this relief to the human service providers, many of whom have not been paid in months and are being forced to slash staffs and services for those most in need.”
“Additionally, we are paying up to 12 percent to some vendors on the state’s $6 billion backlog of bills. By directing the tax holiday revenues toward paying our bills instead, we would not only save taxpayers more than $5 million in interest payments, but we would be getting crucial relief to our providers, who will in turn put that money back into our local communities.”
Syverson also targeted the somewhat confusing nature of the legislation. While the bill’s supporters say it applies to various “school supplies,” he noted many common items used by students were excluded from the approved list.
“There are many inconsistencies with this measure,” Syverson said. “Rainwear gets the sales tax break, but umbrellas don’t; sneakers get it, but not athletic shoes; book bags are included, but not reference books. Parents are expecting to see all of their children’s school supplies included.
Bottom line: Illinois cannot afford this program. Neither Syverson, nor his senate colleague, Senator Burzynski, supported the legislation when it was debated in Springfield. The Senators have believed all along that those dollars should be directed to human service providers; the one group that has taken the brunt of the cuts and delays in payments over the last few years.