Illinois’ suburban mayors meet with manufacturers to discuss common concerns
 

[April 29, 2015]  By Fran Eaton and Dennis LaComb | Illinois Review
 
 GLEN ELLYN, Ill. — Mayors are always looking for new businesses to add to their municipalities’ tax base and manufacturers prudently weigh cost of doing business when they choose where to build or expand their companies.

Last Wednesday at the College of DuPage, thirteen DuPage and Cook County mayors met with 70 manufacturing CEOs to discuss mutual challenges and carve out solutions. The Technology and Manufacturing Association (TMA) based in Schaumburg hosted the event.

During the afternoon’s issue forum, panelists discussed Cook County’s property tax classification system, the state’s infrastructure condition and the prevailing wage mandate.

Businesses in Cook County commonly pay two and a half times more in property taxes than similar facilities in surrounding counties, TMA President Steve Rauschenberger said.

“The late Mayor Daley set up a system that places a higher tax rate on commercial and industrial properties in Cook County because he thought it would be more difficult for them to move than it would for Cook County residential taxpayers,” Rauschenberger said.Hanover Park’s Village President Rodney Craig said the property tax classification system has affected his village’s decision to invest more in the area of Hanover Park that is in DuPage County over the Cook County region.
 

“We’re developing the area around our Metra station, and it will be significantly developed more on the DuPage County side just for that reason,” he said.

Zach Mottl, Chief Compliance Officer at Lyons’ Atlas Tools, said besides salaries, income taxes, Social Security, workers compensation and unemployment insurance, his family pays $140,000 a year in property taxes on their 75,000 sq ft plant.

“If you look at your property tax bill, you’ll see most of your taxes really go to the school system,” Mottl said. “If you want to make a difference in your property tax rates, go to school board meetings and get involved.”

Mayor Rodney Craig, CHOOSE DuPage representative, Elk Grove Village Mayor Craig Johnson, Atlas Tools’ Zach Mottl
Skyrocketing teacher and administrator salaries, pensions and benefits are major reasons property taxes are choking out businesses, he said.

Mayor Craig Johnson of Elk Grove Village said he’s seen firsthand the negative effect Cook County’s property tax classification system has had on businesses. But on the positive side, Cook County has been slowly lowering the property tax rate on businesses and raising it on residences.

“The only way we’re going to do better is to start doing more of what the governor wants to do,” Craig said. “We’ve got to straighten this thing out.”

When the panel’s discussion turned to the need for infrastructure investment throughout Illinois, Craig said the state’s mandatory prevailing wage is a major deterrent.

“Prevailing wage – that’s our biggest frustration. We are forced by state law to adopt prevailing wage,” Craig said.

The problem is that prevailing wage prevents businesses from bidding contracts, Johnson said.

“We’ll put out a $4 million contract, and we’re lucky if we get two bidders because of prevailing wage,” he said. “Without prevailing wage, we might get 20 or 30 bidders, and we’d probably get the project done for half the price. But now we have no choice.”

Prevailing wage, along with high workers compensation insurance demands, is bloating the cost of infrastructure repair statewide, said Michael Lucci of Illinois Policy Institute.

“The cost of infrastructure is an issue, and prevailing wage drives the cost of projects up by 25 percent,” Lucci said. “And workers’ compensation costs Illinois employers 25 percent of their payroll, compared to Indiana’s 7 percent. That’s an 18 percent difference. We should work towards those infrastructure projects being as cost effective as possible.”