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Thomas Clatterbuck

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White Oaks Mall is a very important location in Springfield. While consumers may see it as a hub for shopping and recreation, the mall is also critical for the city’s finances. The mall is one of the largest tax generators in the whole region, both in terms of property and sales taxes. Since Springfield is heavily reliant on local sales tax, city leaders like to keep a close eye on the mall’s health.

So when two of the anchors in the mall announced they were closing, there was reason to be concerned. Both the Bergner’s and Sears will be closing this year. Sears had been in financial trouble for some time, but the loss Bergener’s was unexpected. City revenues were already stagnate; losing the mall could be devastating to an already precarious budget.

But these fears were somewhat allayed at last night’s Committee of the Whole meeting. Mall manger Clay Emerich spoke the council about the state of the mall. Not only did Mr. Emerich state that the mall was not planning to close, he pointed to the opportunities these closing present. Most of the mall is owned by Simon Property Group, but they did not own the two anchor locations. Simon potentially having access to far more space in the mall presents a number of options which are still being explored.

Emerich explained some of these future possibilities. Adding more entertainment options to balance out apparel was one. Other stores are already moving into the mall area, including a Pasta House that will replace the old Denny’s. He also stressed that malls across the region have taken hits of late. Their loss might be Springfield’s gain, if Simon can execute some of the strategies they are working on.

You can watch the full presentation in the player.

Senior strategist, statehouse reporter and political correspondent for Springfield Daily. Graduate of District 117 and UIS. Thomas covers stories in both Morgan and Sangamon Counties, as well as statewide politics.

Business

Davis discusses economic growth, tariffs at Roland Machinery

Thomas Clatterbuck

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Roland Machinery is a Springfield success story. Starting over half a century ago, the company has spread to more than dozen locations across the Midwest. Roland deals in heavy machinery, and works with firms from around the world. Their contribution to the local economy, as well as global ties, made them a fitting place for Congressmen Rodney Davis’ (R-13) to talk about the pressing economic issues of the day.

The booming economy has been good for Roland. The combination of tax cuts, falling unemployment, and increased consumer confidence have driven growth for the company. They are doing more business, and are able to reinvest more because of the strong economy.

But the growing trade conflict with China and others poses some risks to their continued growth. Rising steel prices has impacted some of the attachments to the larger machines. Digging buckets are solid steel. When the price of steel goes up, so does the cost of the buckets. Such attachments are often only a small percentage of the total price of a system; but when the price jumps by 20 to 50 percent, it becomes far more noticeable. And because there are in a global supply chain, trade disruptions can pose unforeseen risks. However, Roland is confident that as long as the economy stays strong, they can manage any new costs.

The tariff balancing act

Rodney Davis then spoke about the current tariffs and their impact on Illinois farmers. Although not explicitly aimed at Illinois, any tariff on soybeans is going to heavily impact Illinois. Chinese tariffs on soybeans alone may end up costing American farmers billions. But soybeans are not the only trade issue from Davis’ district. The American steel industry, including in plant in Granite City, suffered from Chinese trade policy. Protecting American businesses from unfair Chinese practices is part of what has contributed to the current trade conflict.

The farmers’ unexpected politics help simplify Davis’ dilemma. Many of the farmers who stand to be most affected by the tariffs supported President Trump during the election. And they supported Trump in part because of his stance on trade, rather than in spite of it. Davis said that the farmers who have spoken to him say they still trust in Trump’s ability to handle the trade situation, and that Davis should as well. Davis said he is willing to work with the president, but, “If the President asks us personally to trust him on these issues, then we need to see results.”

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Jacksonville residents hold town hall to discuss trailer park rent increases

Thomas Clatterbuck

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Lot rents are going up in two Jacksonville trailer parks. Renting is a businesses, and their costs go up every year just like everyone else’s. When rents rose by eight percent a year and a half ago, tenants saw it as normal economics. But on August 1st, rents at Prairie Knolls and Rolling Acres will be going up again. Not by eight percent, but by upwards of 80 percent. At Rolling Acres, the new lot rent will be $365 per month, up from $195. Legally, Time Out Communities, who now own the park, are allowed to raise the rents with proper notice.

The Town Hall

Last night, nearly 100 park residents and other members of the Jacksonville community gathered at Lincoln Avenue Baptist Church to discuss the situation and brainstorm about what could be done. Organizers Ron Hoffstadt and Danny Davison have made a counter offer of a ten percent increase with a two year lease, followed by another ten percent increase after that. They said that this would give residents time to plan for future increases or sell their homes and move out. Many residents also took the opportunity to share their experiences. In addition to the rent increases, they expressed frustration with a perceived general lack of maintenance in the parks.

But to actually stop the increase, they would need a lawyer and a judge. If the residents could get a hearing, the judge could issue an injunction to stop the increases. However, these individuals would need to work on a pro-bono basis, because the residents cannot afford legal representation.

There are few other options available to the residents. Increasing rates is perfectly legal. Even the Time Out Communities’ resistance to offering two year leases is only a minor legal issue. The $365 rate could be implemented via the lease with little trouble from a legal perspective.

State Representative C. D. Davidsmeyer (R-100) shared his frustration with the limited options the residents have. In comments very similar to the city council’s on Monday, he said the law is what it is; and the law allows the rates to be raised this way. Davidsmeyer did say that it was likely that reform efforts would enjoy bipartisan support in the General Assembly. But even then, he said they would not be back in session until after the November election.

Why not just move?

If the residents do not want to pay the increased rents, why don’t they just relocate? Ironically, having a “mobile home” usually makes relocation harder rather than easier. Trailers are not nearly a mobile as their name would suggest. Moving them is a very expensive undertaking. It costs around $5,000 just to connect a trailer to a truck that can move it, not counting any additional costs of the relocation. Homes often have two trailers, doubling these costs. These costs make moving a difficult proposition for those residents on fixed incomes who would struggle to pay the new rent. They can’t afford to stay and they can’t afford to leave.

But other challenges await those who can afford to relocate. Time Out Communities has purchased many of the trailer parks in Morgan and Sangamon Counties. The same dramatic rent increases are likely in all of the parks run by Time Out Communities. As one woman put it, there’s no where for them to go.

So what’s going to happen?

The residents have gathered support from many local leaders. Rep. Davidsmeyer, the City Council, a coalition of Pastors, as well as other local citizens have all spoken in sympathy of their plight. But unless the residents can get a pro bono lawyer and judge to take their case, the rent increases will probably be implemented August 1st. Hoffstadt and Davison said they will continue to organize and petition, but they are just running out of time.

Davison has been passing a petition to get a more reasonable increase put in place, and is continuing to gather signatures. The hope being that public pressure may cause Time Out Communities to reconsider their rates. That petition can be signed at the American Legion Post at 903 W. Superior in Jacksonville.

You can watch the full meeting in the player above.

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U.S. Supreme Court ruling on internet sales tax will likely mean consumers pay more

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Illinois consumers can expect to pay more when shopping online after the U.S. Supreme Court ruled that states have the authority to require out-of-state online retailers to collect sales taxes.

In a 5-4 decision in South Dakota vs. Wayfair Inc., the court ruled states can require sellers to collect sales taxes even when the seller has no physical presence in the state. The court sided with the government. Concurring with the majority opinion, new Justice Neil Gorsuch wrote that the ruling is meant to “rightly end the paradox of condemning interstate discrimination in the national economy while promoting it ourselves.”

Chief Justice John Roberts dissented.

“Any alteration to those rules with the potential to disrupt the development of such a critical segment of the economy should be undertaken by Congress,” he wrote.

Illinois already requires consumers to self-report sales taxes for online sales. The ruling shifts that burden to sellers.

Michael Leonard, a tax professional based in Oak Park, Illinois, said he knows of virtually no one who self reports online purchases on tax filings. He said the ruling could put small businesses that sell online in a bind.

“Now that’s going to be implemented on the internet and paying the sales tax, now you’ve got to employ and accountant, there’s more money involved, you’ve got to pay tax, it’s gonna make them not want to do it, of course,” Leonard said.

Small businesses can’t navigate the different rules of the 10,000 taxing bodies across the country, said Jessica Melugin, associate director of the Center for Technology & Innovation at the Competitive Enterprise Institute. She said the ruling is a tax increase for consumers.

“The whole point of this whole exercise from states and localities is to get more tax money in their coffers so that’s going to come out of consumers’ pocket books,” Melugin said.

The Illinois Department of Revenue also praised the ruling, estimating it will bring in $200 million to state coffers annually.

“To be clear, this is not a new tax. Illinois residents are already obligated to pay a Use Tax on out-of-state purchases and this prudent decision will allow states the ability to enforce Use Tax laws that are already in existence,” revenue department spokesman Terry Horstman said in an email. “With this decision, we level the playing field for Illinois brick and mortar retailers.”

The high court’s ruling was cheered by brick-and-mortar retailers that have complained that online sellers had a tax advantage. The decision also was welcomed by Illinois municipalities, said Bill McCarty, Springfield’s budget director.

“This will provide a little bit of a cushion, but more importantly it provides a stepping stone we need to eventually bring those tax dollars home, which is where we need to get to,” he said.

McCarty said the ruling could mean Springfield will get an estimated $300,000 from the state, which hands out state sales taxes to municipalities on a per capita basis.

Illinois Retail Merchants Association President Rob Karr said the ruling is a win for his 20,000 members.

“This simplifies life for retailers and for consumers and it levels the playing field for retailers and their internet competitors,” Karr said.

“All eyes will now shift to Congress and the states,” the nonpartisan Tax Foundation said in an email. “One thing that will be important to remember as states look to grapple with today’s decision: This ruling is not a blank check. The Court specifically observed that South Dakota’s law, and its tax laws generally, minimizes the burden on interstate commerce. Other states should craft their laws accordingly.”

 

Article by Greg Bishop, Illinois News Network. For more INN News visit ILnews.org 

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