ROCKFORD, IL — The Greater Rockford Chamber of Commerce is activating its political action committee to oppose the proposed countywide 1% schools sales tax that will appear on ballots in Rockford and Winnebago County March 17.

School districts throughout the area voted to place a referendum on the primary election ballot asking voters to approve a new 1% sales tax. The idea is to shift the burden of school improvement from property taxes to sales taxes.

But there is nothing forcing schools to reduce property taxes even with a new revenue stream, Chamber CEO Angela Kay Larson said.

“There’s no guarantee that an increase in the sales tax will result in a property tax abatement,” Larson said. “Each district could decide to do that, but there’s no accountability that they actually will. And there’s no sunset on it.”

Larson said although the chamber supports strong schools, there are parts of Winnebago County that are already paying nearly 10% sales tax. That can hurt small businesses and consumers, she said. There are other options for schools besides a sales tax increase, she added, and business leaders are concerned about transparency and accountability associated with the tax.

Members of the chamber’s government affairs committee opposed the sales tax, and the business organization’s executive board agreed. The chamber’s political action committee has established a website at rocpac.vote offering more information on their opposition and yard signs for people who want them.

Money from the schools sales tax, which has been adopted by 58 of Illinois’ 102 counties, can be used to pay for school facility improvement and maintenance. The money can also be used to retire old debt from building or renovating schools. It can also be used to abate property taxes.

It can’t be spent on salaries or teachers, but there are exceptions that it can be used to pay for school resource officers and school psychologists.

Rockford School Board President Paul Carpenter said the sales tax is an alternative to paying for school aside from property taxes which are unpopular with residents. A large portion of sales tax is also paid by visitors, Carpenter said.

Sales taxes vary by city and county across Illinois which charges a base general merchandise sales tax of 6.25%. Rockford shoppers pay an 8.75% sales tax for general merchandise not including groceries or titled vehicles. Loves Park and Machesney Park have the same sales tax rate, but consumers pay 9.75% in special business districts. It’s 9% in Freeport, but 8.75% in Rockton and South Beloit, according to the Illinois Department of Revenue.

An additional 1% sales tax on general merchandise across Winnebago County is expected to generate about $40 million a year, the same as the county’s public safety tax. It would be apportioned based on enrollment. That means the lion’s share — an estimated $25 million — would go to Rockford Public Schools.

Carpenter has said Rockford would use the money to continue following its $180 million five-year facilities master plan and then consider property tax relief.

Harlem School District Superintendent Terrell Yarbrough has said about half would be spent on school repairs and half on property tax abatement. Hononegah School District would use the money to pay off bond debt faster, relieving pressure on property tax payers.

A similar 1% sales tax in the city of Rockford dedicated to infrastructure has successfully reduced reliance on property taxes and cut borrowing which comes with huge interest payments to fund road and infrastructure repair and construction.

But NorthWest Illinois Alliance of Realtors CEO Conor Brown argues Rockford’s infrastructure tax comes with a detailed annual five-year plan that spells out to voters how the money is being spent. It also has a five-year sunset clause that requires the city to return to voters for renewal of the tax.

Brown said area school districts have not placed a sunset clause on the tax which would allow for voter review of the money every few years. He said most districts have not laid out a detailed plan for how the money would be spent and it is unclear how much would be dedicated to property tax relief.

And Brown also said that weeks before the election, there is no grassroots campaign has materialized to push for the sales tax.

“Look back at all their past successful referendums,” Brown said. “Where are the community leaders that are out there in front, sharing a defined plan with the voters? There isn’t. This is nearly $40 million with virtually no community engagement.”

Jeff Kolkey writes about government, economic development and other issues for the Rockford Register Star. He can be reached via email at jkolkey@rrstar.com and on X @jeffkolkey.