[This transcript was generated automatically from audio using AI and hasn't been reviewed by a person -- it can contain mistakes, including plausible-sounding sentences that were never actually said. Treat it as a starting point, not a verbatim record.]

[0:04] The meeting of the Cook County Independent Revenue Forecasting Commission will now come to order. I will now call the roll. Chair, Commissioner Davila, Commissioner Merman, Commissioner Falen, Chair, you have a quorum.
[0:22] Good evening everyone, and welcome to our meeting of the independent revenue forecasting commission and my first is chair.
[0:30] It's nice to be here with all of you tonight. Before we begin tonight's agenda items,
[0:36] I wish to recognize the hard work and collect the efforts of everyone in this room,
[0:41] the Bureau of Finance and the Dynamic Commissioners. Thank you for everything you do.
[0:46] Today, we're going to discuss some potential recommendations of the IRFC, which will not be finalized until August.
[0:55] Additionally, we will provide quarterly updates, which include updates on our bus sustainability.
[1:01] We are also going to go through some exploratory scenarios assessing methods to grow existing revenues.
[1:07] I think this can be a useful thought exercise to understand and refine our modeling and to get
[1:13] a more comprehensive look for counties who have a new picture.
[1:17] I look forward to this group's inside an input, and finally we will also be diving into
[1:22] the county's sales tax.
[1:24] So again, thank you to everyone for being here and we can get started with the meeting.
[1:29] The first item on the agenda is the approval of the minutes from the meeting of student
[1:33] 30th, 20, 26, fair. We need a motion to approve the minutes to proceed. Is there a motion to approve the minutes? Yes. Is there a second? Okay. The motion to approve has been moved by Commissioner
[1:50] for Bayland and second-by-commissioner Miriamen.
[1:54] All of those in favor signify by saying, yay, yay.
[1:59] All of those opposed signify by saying, yay.
[2:04] Any opinion of the chair, the A-savit,
[2:08] and I'm sorry, and the meeting minutes
[2:09] will be filed with the Cook County Secretary of the Board.
[2:13] The next item on the agenda is a presentation
[2:16] from the team covering quarterly updates,
[2:19] the county's sales tax and the preliminary IRFC recommendations.
[2:26] And it's, is it?
[2:28] Yeah, thank you, Angela.
[2:31] So we'll have some updates this evening on some of our deliverables
[2:36] as they relate to the principles of the aisle.
[2:39] See here and your recommendations of this body,
[2:44] which we'll get into on the next slide.
[2:48] So,
[2:51] regarding the impact of Oba, the Oba provisions on the health enterprise fund, we recently analyzed the budget from states.
[3:03] There wasn't a lot of information in there that would change any guidance as far as forecasting goes to the health fund.
[3:14] So, you know, we'll be continuing to monitor any information that comes down to the state continuing to work partner with our friends at the hospital.
[3:25] One thing to note those at the state is continuing to fund health benefit for immigrant seniors, their budget, which we have built in, we'd be a reflective that in our June forecast.
[3:39] Art of the Sustainability, the county that is currently fine to hearing its allocation,
[3:47] it's practically, but you are per reserve, it should have set up a couple of years ago.
[3:53] And then revenue growth options, which will dive into on the next couple of slides.
[3:59] So this year, the team, we conducted an analysis of county tax revenues,
[4:05] I tend to find reasons for a slower declining growth, and some refugees understand why
[4:13] they're stagnant.
[4:14] I'm going to share some updates at the January and April meetings on our findings.
[4:21] But on the next batch of slides here, we'll walk through some exploratory scenarios
[4:25] and what modifications would look like to existing taxes in the county's budget.
[4:35] Okay, so as Angela noted,
[4:37] We'll be going through some of the county's revenue sources in this section, exploring some scenarios, what different modifications and estimator revenue impacts would potentially look like, as well as providing some background into our methodologies to estimate these impacts.
[4:56] And so the first revenue.
[5:00] Here that we looked at is sales tax. Seeing what a potential modification would look like in the county sales tax. So the, the county's current sales tax read is 1.75% and so we have a scenario of here of what that would look like if it were to increase a quarter per cent to 2%.
[5:24] So it's estimate what the revenue impact would be from this modification, and we'll also be talking about this, the sales tax a bit more presentation, but we use our current sales tax model, which is a regression model that is used to predict the sales tax base.
[5:43] We adjusted the tax rate to 2% effective January 127, which would be right now the earliest
[5:54] of the county would be able to implement that change per state statute.
[6:03] So this January 1 effective date would mean that the county would begin seeing an impact
[6:08] from the Modification in April of 2027, which accounts for the lag
[6:15] from when the state who administers the tax for us,
[6:17] collects it and eventually disperses it to the county.
[6:23] A key assumption in this modification is no change
[6:27] in the purchasing behavior of consumers
[6:30] from this potential rate increase.
[6:33] And so the projected revenue impact from this modification here,
[6:37] that we're estimating fiscal year,
[6:41] $177 would be approximately $141 million higher
[6:46] from the current projection of the prior forecast
[6:51] of the sales tax.
[6:53] But then in the impact would be about 200 to 220
[6:57] and 2028 and into the out-years.
[7:01] So, this full year impact of 200 and 1 million,
[7:04] It's about 14% higher than the forecast of projections for 2028 into the fifths of the outshars.
[7:20] So the self-sex rate is going to go up. Maybe you can might have gone up today.
[7:28] Right. Because it's first.
[7:31] Yeah. Yeah.
[7:34] You speak up to you.
[7:35] So it's going to go up, have you have any projections about what, you know, that to
[7:46] lower your revenue, if it pushes out sales, do you have a projection of that? And then,
[7:57] you know, the projection of this would also perhaps be, there's an interactive of that.
[8:03] So I just wonder, do we have any idea of what that ought to do?
[8:09] We're having x-forward that yet, what's a surrounding,
[8:17] if that were to increase how that would impact our base in potential sales.
[8:22] So guess, okay, yeah.
[8:25] And then,
[8:28] I guess, so the 14% difference, 14% increase in revenue,
[8:33] So, is it essentially essentially essentially assuming it's just linear?
[8:40] Because it's 25% over 1.75.
[8:44] Yeah, I'm trying to do the math in my head, but that sounds about right.
[8:47] That's essentially what you're assuming, right?
[8:50] Okay.
[8:54] Okay.
[8:57] So, I think we had some discussions before,
[9:00] You know, we would say that's optimistic, assuming that, you know, if I call some drop-off
[9:07] and sales. So it just seems like I should note that. Yeah. Yeah, correct. Yeah, that's,
[9:12] let's see, there's no back
[9:17] -to-voinance. That's not a back-to-here. This is just simply no change in
[9:22] lots of the basic consumer behavior. Mm-hmm. Is there a way to look at past increases to
[9:29] to confirm that or to sort of back that out
[9:34] to happen in the last decade there.
[9:38] We could certainly take a look at that.
[9:40] I'm sure we have data to be able to do that.
[9:42] I have very few actual instances that we could look at.
[9:47] So I mean, you could do an analysis,
[9:51] but I'm not sure how.
[9:55] Well, there's one is the implementation
[9:57] and whether or not it rolls out perfectly.
[9:59] See you in the next video.
[10:00] You're also looking at a handful of instances where we would be directly impacted. So you're now a sample size that would be great.
[10:08] Yeah, you could make some assumptions. I think the issue is that right now most of online sales are covered.
[10:15] So before when there would have been an increase, there would have been a bigger opportunity for avoidance.
[10:20] because a lot of the goods were still being touched at the six and quarter percent.
[10:25] Worst Nye, you've got pretty much everything to be in the times that the how right.
[10:32] So, I'd say more of a reduction in consumption rather than any kind of deviation.
[10:37] I'll be here if you're into Wisconsin or North Carolina because that's pretty much
[10:43] tapped. Back to David's point, did you look at the RTS to Mountain,
[10:47] but what were they assuming in terms of elasticity
[10:49] for their revenue increase?
[10:52] I did not look at it personally.
[10:56] I think my coal may have, fortunately it's not here,
[11:00] but I think that might be a hell of a conversation
[11:02] to have because that wouldn't be discussed.
[11:06] I would think of life in the state legislature.
[11:10] Yeah, they cover, is that restricted to the county
[11:13] or it's a bigger area?
[11:15] It's bigger.
[11:15] I guess one, I just concerned because the rate is very high in Chicago, probably top of the highest rate in the nation, and I'm just worried that there's a breaking point, that's why I, so to say.
[11:35] Well, would it be a, like, what do you mean by breaking point?
[11:39] We already just people had effects, people's consumption or houses tax of like, you know, I mean, I'm really, I'm really doing hand waving here.
[11:48] But at some point, people had to say, you know, this is ridiculous. I'm going to make the effort to go to a different county or do something to avoid the sales tax.
[11:58] becomes really, you know, the skull, when it's. Yeah, and you know, I think that's worth
[12:02] while we search in like, what opportunities would there be to go to another kind of
[12:08] to get a lower tax rate? Because I'm not sure with all these recent changes at the state of
[12:13] level. I'd beg of a factor. That is anymore. I mean, it used to be like, you know, we need to be
[12:19] saw that with gas. He said, we're at someone ever, but I'm not sure, but it's, so I would just see
[12:24] world reduction in consumption? Yeah. Well, I don't know. I mean, I think the most of
[12:32] kind of the most relevant point for policy is just to set, you know, give it some
[12:37] other balance and lower balance. I think you're really at the upper balance. Yeah. And what's
[12:42] a reasonable lower balance? Yeah. Yeah. And it might be a signal.
[12:51] In another way, it might not just
[12:52] that like articles that they used up buying it or you look to buy somewhere else, but essentially
[12:57] your budget is depleted at some points, so you don't buy something.
[12:59] I'm thinking about that. Yeah. In that way, it's not like this concept and you're getting
[13:05] to think this about your constraint that gets hit at a certain point, so you don't end up going
[13:08] that extra me or something.
[13:20] Soon some level of rigorous consumption associated with the increase
[13:24] in the sales sector.
[13:27] Once possible, you could look at that, um, that's good. People spend
[13:33] money on the consumer, whatever. Because if it's services, they're more likely to drop off than
[13:38] it doesn't matter because they're not taxed. When I say, I don't, I'm being flipping. It's not
[13:42] going to affect your sales tax revenue. If people reduce the consumption of services,
[13:49] but if they're constrained, forces them to reduce their consumption of goods, then that's a different
[13:58] creation?
[14:02] Yeah, I mean, it's helpful to know. I think we've talked about this a little bit.
[14:06] It would be helpful to know really where your sales tax revenue is coming. What are the
[14:12] what are the big drivers?
[14:21] As I see code perspective, if you will,
[14:26] or.
[14:26] It's like sick codes. Yeah, I don't know. Yeah, I mean, now you have data right, you actually
[14:33] data, the level of entity, right? And maybe you could do some analysis of that to think
[14:44] about, like, where's the volatility in that? And I don't know how much you can think
[14:49] of it. What kinds of things are selling? Is it like restaurants? Look, I always think
[14:55] of it as cars, but it's not cars, it's apparently because it's handled differently.
[15:00] Here. So I don't know what, really, the components are. It's driving sales tax revenue. And look at it. It's pretty even across all of the sick codes that we have.
[15:12] There's every call and have to look at it. I'm pretty sure we have. I think we have an analysis and our rating. You can see presentations. It speaks directly to the industry closed set ourselves reported
[15:28] regarding like the sales tax collection rate.
[15:31] And the whole thing that we always say when we present that slide is that, you know, it's, it's pretty, um,
[15:39] going across all of the different areas. There's no like, um, in like one particular component that is outweigh, like the rest of what the nation see.
[15:51] I mean, it's good, it's diversified, that's probably some precision.
[15:58] That's the arts in the side.
[15:59] I think the S.I.C. called categorization, and I'm sure you know this is not to be relied upon because it's arbitrary if they don't choose.
[16:09] And it's supposed to be the top two things that are so it could be anything.
[16:14] But to do it's quite not that you have the data for like some big players.
[16:18] So, just looking at them by, not by the SIC code, but by their volume and then I think
[16:27] you're right, I think there's nothing that really dominates, but just to verify that
[16:32] that's the case and then you know, you should judgment on what industry or what SIC
[16:38] code or whatever they should fall into and like it's more like relying on that SIC code
[16:45] Is problematic. Yeah, I think like we've I ever call talking about this. You've just like internally
[16:52] You'll feel like the last couple years like we kept that out of a presentation. Yeah, for that reason
[16:57] Yeah, there's always so much
[16:59] Yeah, you don't you don't want to make too many
[17:03] Judgments from different that itself reported. Yeah, but we have we have started
[17:10] with having more data now to things like top 100, you know, starting to compile that, that's something
[17:24] down there from a high level.
[17:29] So, yeah, we can continue to expand on that, but obviously categorize it in different ways.
[17:39] but it's very careful and, like, obviously, you can report that information publicly.
[17:44] No, yeah, yeah, yeah.
[17:46] Or internal purposes, we could look at, say, the top sellers,
[17:54] in terms of contributors to the sales
[17:58] sector.
[18:07] Certainly.
[18:08] It's like
[18:12] the idea of having a bounce on what could be potential impacts, the elasticity,
[18:19] be the production and consumption of certain, I think that makes a lot sense, we're breathing
[18:25] to our forecast and making a judgment call about what we are incorporating for our estimates,
[18:33] using the kind of straight methodology forecast as our faith, just to be a little bit more
[18:40] conservative.
[18:46] So the next revenue we look at that is our property tax
[18:51] let me specifically house of mental modifications
[18:56] in the property back and forth would impact the allocation
[19:01] of that levee that goes into the general fund.
[19:06] So just some background, Cook County's property tax revenue
[19:11] comes from a base tax levee, as well as from expiring
[19:17] statistics, expiring, incentive, incentives, as well as new property construction. So the county's base property tax levy is approximately 720 million that amount has not been adjusted dating back to the 1990s.
[19:37] And in addition to that, based property tax, the total levied for fiscal year 2026,
[19:45] it included about $100 million to handle property taxes captured from these new properties,
[19:53] the expiring tips, districts, and expiring incentives, cumulative from previous year.
[20:01] So, after this call like a gross, levee is calculated, portions of that levee are allocated for the purposes covering debt service obligations, allocations to the annuity and benefit funds,
[20:17] after all projects, as well as the election funds.
[20:22] A portion of the levees also allocated has been allocated each year to support health and
[20:29] enterprise funds for their operations, and then the remaining amount is what's allocated
[20:36] into the general fund.
[20:38] So in fiscal year 2026 approximately $120 million was, and property tax revenue was allocated
[20:46] and the general funds.
[20:50] So one scenario we explored is adjusting the base levee,
[20:57] that's 720 million, increasing the base to keep pace with inflation,
[21:03] starting in 2027 into the out-years.
[21:07] We utilized Moody's baseline CPI forecast for the Chicago metropolitan statistical area.
[21:17] While it was not a factor in our projections, we also would have assumed a cap on the annual inflation.
[21:26] So that an increase in the base level would not ask 3% in any given year.
[21:33] The revenue impact to the general fund would be about $20 million of additional property tax revenue allocated to the general fund in 2027.
[21:44] That's about 17% greater than the amount we were projecting for 2027 before this, and as you
[21:54] could see, that amount increases in 2028 into the out-years, as the face would increase
[22:03] with inflation.
[22:05] And then a second scenario we explored is a one-time adjustment to the total gross
[22:12] level retroactive to 2020. So increasing the base levee as well as the levee coming from these
[22:20] expiring incentives, tips, and new properties if they had both thrown annually with inflation
[22:28] dating back to 2020. So the revenue impact to the general funds from this one time adjustment
[22:35] would be about $170 million in fiscal year 2027 and into the out-years since it would be
[22:46] just in the scenario one time increase. And so we utilized CPI for all our urban consumers
[22:55] for the BLS to come up with these estimates for the second scenario here.
[23:06] All right, Missy, can you say when the last time the piece like it was adjusted?
[23:10] It was close. I think it was 1996. Yeah, and
[23:17] so nominally it's been flat, but I guess
[23:20] you think of it as like real, it's been second.
[23:27] Does that sound as a 24% increase?
[23:30] Yeah.
[23:38] I suggest it when we that before, when you breathe in, I'm just that one,
[23:43] one other way to think about it would be thinking about keeping the tax rate
[23:48] rather than the gross amount of constant,
[23:56] which you could pick whatever year's tax rate in one.
[23:59] The tax rate's obviously been falling.
[24:01] The base is going up and up.
[24:08] It's sort of like keeping the tax rate constant.
[24:12] It's almost like saying the property tax burden
[24:19] at this per dollar, real estate wealth is not going on.
[24:29] different forperated that is by the addition of new property and the tissue that is
[24:39] you just fired to inspiring incentives. So we try to capture that natural growth in
[24:48] the tax base whenever the issue, whenever we develop the levee,
[24:57] started doing that, I think in
[25:00] I don't remember the exact date, but it was probably about seven years ago.
[25:11] They don't think that's kind of, look, one way of doing it. But like I think what you were, you were suggesting, it's like, what did we have, what if we knew the assessed value beforehand, right? And then back into our total property tax, levy based on that. And I don't think we would know that until, let's read looks retroactively.
[25:33] Well, I mean, you could look at what the rate was. You know, the rate's been going down.
[25:40] And so it's supposed to be, it's not down by eight percent.
[25:44] Yeah.
[25:45] But if you raise the level by eight percent, you sort of get to the same place.
[25:50] I mean, you can do something on the side.
[25:52] Yeah, I don't know this necessarily better than this.
[25:55] It's kind of like intuitively the way I would think about it.
[26:00] That's kind of what you're doing with the sales tax, like gas, with the sales thing.
[26:05] You're adjusting the rate, I guess, with the sales tax.
[26:10] Just
[26:22] for our jump in, this slide will go over amusement tax, where we create a two different
[26:30] proposals to address the revenue growth to give some context, currently amusement tax that they
[26:36] administered by a three-tier system was right set at 1% 1.5 and 3% for each tier.
[26:45] Now, the first proposal is pretty straightforward where we suggest a flat rate across all
[26:51] tiers at 3%. This adjustment would only be an increase to tier 1 and 2, both of those would now
[26:59] go to 3%. Well, tier 3 would remain unchanged. On the methodology here was used in our
[27:07] historical revenue data to calculate the tax base for all tiers, then apply that new rate for each tier and at the bottom we can see the projections for proposal one as roughly 15 to 16 million a year and additional revenue.
[27:25] We're proposing two.
[27:29] We incorporate a tier structure and the addition of streaming tax base.
[27:35] We saw a lot of opportunity here.
[27:39] As we see the city of Chicago already implements a streaming tax.
[27:44] So our Department of Revenue conducted an analysis of cities revenue from streaming.
[27:49] We incorporated those estimates into the county forecast for amusement in the out years and for streaming alone that would bring in 33 million annually.
[28:03] The breakdown of the tier restructure, this is shown in the methodology section.
[28:09] They address and it's drafted to be consistent with the cities of amusement ordinance language
[28:15] This means tier one now be exempt tier two and three are both sets at the flat rate of three percent
[28:25] For tiers one and two the criteria changed and
[28:32] 60% of tier one would be a reclassified and elevated tier two ultimately increasing that tier two base
[28:42] And with both of these changes, the tier restructure and the streaming, we can see the total impact of proposed two is around $45 million in additional revenue.
[28:56] And the streaming is taxed to 3%.
[28:59] Is that right?
[29:02] So, when we did the analysis on the city of Chicago, they tax at 10%.
[29:08] percent. So they take the 10.25 I think it is. So our estimate right here will probably be
[29:17] along those levels
[29:21] just for the string at
[29:25] all.
[29:26] Oh, she knows her. She doesn't have jumped in. Yeah. Tina go ahead.
[29:32] I believe that this reflects the tax rate of 3 percent on the taxable base that we
[29:42] us from the city's records from no data.
[29:48] The proposal should be that the tax is the same
[29:52] way across. Yeah, three percent. You're adding string into your base, I think. Yeah.
[30:02] Thanks Tina. We're welcome.
[30:15] We know anything,
[30:19] I guess that I also wonder about the vision of avoidance from screening. I don't know how easy that is to do.
[30:27] We register a different address. It's not the impacts or something.
[30:34] I guess you had a call. City of Chicago will find out.
[30:41] Yeah. You think this would be more elastic to that in terms of like projections.
[30:45] again, you're assuming that there's no change in pattern, but, you know, you can get entertainment
[30:51] in different ways of these things to whatever. So this, it might be, this might be more,
[30:58] more elastic. Basically, yeah. I'm sure you guys will see it with a 10% tax, then you're adding to that.
[31:06] So people are kind of filled with the elasticity of the other or we put it in the past.
[31:16] It's your land now.
[31:18] Yeah.
[31:19] I don't know.
[31:20] I got subscriptions.
[31:22] I don't need four at once.
[31:24] Passwords share the same.
[31:27] But you could still create it.
[31:29] I mean, like, you could, you could avoid these taxes.
[31:33] Yeah.
[31:33] I don't know if there's a literature on it at all. But anyway, again, it's probably just to say this is a very optimistic effort.
[31:42] You know, so be it.
[31:44] Yeah.
[31:44] And I think with some of the consumption things that I meant before, I was going to be interactive effects.
[31:49] You know, so like these are estimates in isolation of an individual tax.
[31:54] But if three of them were implemented, then some of those things might come to bite a little bit more.
[32:02] And
[32:13] here we have Gamble Machine Tax, for Gamble Machine Tax, we administer emblems for probably Gamble Machines.
[32:20] We thought the opportunity here was to increase the cost video gaming terminals, also called VGTs.
[32:29] The cost of these emblems from 200 to 500, VGTs are just gaming terminals, but these are
[32:38] ones you've found in Mom and Pop stores, not casinos.
[32:42] We have a different category for casinos video game channels.
[32:48] Our methodology consisted of using our 2025 revenue data to find a number of emblems issue
[32:56] going to apply that new rate. The resulting percentage increase was then applied to the forecast
[33:02] to project the out years and we can see this roughly create 3 million in annual impact.
[37:05] If anyone on the call can verify that they can hear me, that would be great.
[37:11] A lot in clear. I have a thumbs up. And can you see my presentation? Yes.
[37:22] Yes. I got it. Yes. So, okay.
[37:24] It's not going to share to the screen, but we're sharing in the meeting. Is that acceptable? Are you recording?
[37:31] It's not recording, actually. Okay. And then I think we can just look at our printed out copies.
[37:38] and pivot there. So we're currently still on gambling machine tax. And then if anyone on the call,
[37:49] like it cuts out, please feel free to jump in and defy us. Gambling machine tax, I think David,
[37:59] finish and conclude at this slide if there's any commentary to let us know now. Otherwise, we'll
[38:07] on to the next line. I think that was just wondering what's the branding and this revenue source with the all the phone line.
[38:16] Oh, like.
[38:18] Oh, like.
[38:21] Sports.
[38:22] Yeah, I think the thing is that they have a funding revenue source.
[38:26] I need your best more so impacting the teachings.
[38:29] As it's more because we also have a sports way during tax.
[38:33] That has been more volatile, so it's been hard to parse out how those prediction-market apps.
[38:45] I guess I would say I've been impacting because it is, it supports major attacks still,
[38:53] Well, it's a new county, but for the VGT revenue is really driven by the amount of establishments and how many things they have, the most you could have is six terminals in your establishments.
[39:11] And so we'll look at the game, the game, the game boards,
[39:17] reports of how the sheets must see how that's been trying
[39:22] as far as I can, how the salvage means.
[39:25] Usually, all the establishments backs out.
[39:28] There's about 45 of them in account that you have these terminals.
[39:35] It has been inked over the
[39:43] last couple of years.
[39:46] So I think it's more so just the where's the ceiling with the number of establishments.
[39:53] So we've tried to forecast that frequency though.
[40:11] Okay, moving on to alcoholic beverage tax. So, the alcoholic beverage tax is currently structured as a hybrid tax with flat per gallon rate taxes on beer and liquor and rates dependent on alcohol by volume for wine and similar products as seen in the table just below.
[40:33] So the revenue growth proposal here would be to increase all rates by applying the cumulative inflation since the rates were last increased, which was in 2012, and that would be a 41% increase, which was then applied to the rates.
[40:49] In terms of methodology, we apply the new rates to the 2025 tax base, is that's the last year of complete data that we have for each tier.
[41:00] And then this calculated the revenues that would have been generated at these new rates.
[41:05] And then we calculated the additional revenues for these out years and the forecasts by applying this first-edged increase to our baseline forecast.
[41:14] So, for FY27, we would generate approximately 14.8 million while the out years were anticipating an additional 14.5 and this dip accounts for the dip in trends of alcohol consumption.
[41:29] And there's we're forecasting a trend in reduced alcohol consumption.
[41:39] And the increase is a per gallon, not all of them, so beer and liquor are per gallon
[41:46] rates, so it's a flow, but if you say 34 cents, what's the 30% for cents for what?
[42:00] Um, that we're out, uh, what's that thought is pretty that would be very good.
[42:05] Yeah, I'm just okay.
[42:10] Okay.
[42:11] The base on volume of what's in the liquor.
[42:17] These,
[42:22] they really, that's not just surprised and this is what you do now, too, but they really jacked up these things above 20%.
[42:31] So that's I guess that's that's really more of the better than talking about.
[42:36] Maybe it's one, though, though, that.
[42:39] Yeah.
[42:40] So, it's a lot higher.
[42:43] Yeah.
[42:47] So, we talked about changes in topical consumption.
[42:50] And I'm hearing that people were built in.
[42:54] Yes.
[42:55] And why can some change be a consumption for liquor or mixed drinks?
[43:00] Now, I want to substitute effects.
[43:03] I don't know if we're doing the marijuana consumption trade-off is incorporated.
[43:10] department of revenue can speak to that. I don't know if Tina wants to jump in.
[43:15] This is what could be. So this is showing a one-time reduction in revenue,
[43:19] going from 27 to 20 and then we're testing. Right, the rest of the period.
[43:24] Disapp. Yeah, I believe I believe seeing reasonable based on previous trends before
[43:29] taxing. I mean, isn't this just a source that is declining over time?
[43:33] Yeah, we have seen it. The planning and the last couple of years,
[43:38] I think against our June forecast, we had really forecasted them out as flat.
[43:46] I think that's why I just probably showing it.
[43:51] That's just the same year over here, I'm out.
[43:55] Tina, I noticed you unmuted.
[43:57] Did you want to add to that?
[44:00] I heard you say something about the, I didn't hear the question.
[44:03] I heard something about marijuana and some kind of department of revenue.
[44:06] and so I didn't know if you wanted me to speak.
[44:11] I don't know if I wanted to speak.
[44:13] Okay, thank you.
[44:17] Okay, we're going to do this.
[44:19] Thank you, Tom.
[44:27] We've been going to that before.
[44:30] Ted, let me know.
[44:31] Wipe eyes back up.
[44:32] So we're going to try it better.
[44:35] I know, sorry for all the privates.
[44:38] Thanks for everyone's flexibility.
[44:43] Tina, do you want to jump in now, maybe we can hear you?
[44:50] Can you hear me?
[44:51] Yes, we can.
[44:54] So I said I did not know if you wanted me.
[44:57] I heard.
[44:59] I couldn't hear that.
[45:00] Question, I heard marijuana and I heard Department of Revenue and I didn't really hear what the question was, so I don't know if you wanted me to weigh in anything.
[45:12] I think the relevant thing is why is the projection of revenue increase for alcohol, black, insumption is the climate.
[45:25] It has been declining overall in the last few years.
[45:33] I did not do these projections, but we did look at the individual categories in this.
[45:44] And beer continues to decline.
[45:46] each year. Hard liquor is actually it's spiked after COVID in 2021 and that has been kind
[45:59] of volatile since then and wine and which is like generally the category under 14% is wine
[46:13] and then 14 to 20% those have been pretty stable.
[46:19] So if bearware is the main component that
[46:24] continues to decline, I think that it should remain relatively stable. I mean, I'm not sure if
[46:36] it's
[46:44] And I'm not sure what the thought process behind the leaving it flat for the outlying years unless maybe someone assumed it was going to just level off at some point.
[46:59] Yeah, I think I think that was the thinking and past iterations of the forecast is that there would be some bottoming out of that that, you know,
[47:10] You're wouldn't just continue to decline perpetuity.
[47:17] So I think that was the main reason why.
[47:20] Hope that's true.
[47:23] Just ask the question, so you say why is trending stable,
[47:28] but you see some volatility in what was the other kind of clicker?
[47:33] Hard clicker above 20%.
[47:35] So I think everyone was doing shots after COVID.
[47:38] You know, a lot of shots and then it kind of went down, back up a little bit and so it's hard to say where that will go.
[47:48] Not category.
[48:00] I guess just to be clear, you have looked into the longer term forecast.
[48:05] But I'm particularly familiar with the line and that it's my understanding that the trend is downwards.
[48:11] But the expectation that that will continue because younger people aren't drinking as much as older people.
[48:17] I don't know what percent of the revenue source wine makes up all of these three categories.
[48:25] I don't, I'm not familiar with the trends in beer or our hard liquor.
[48:30] So I'm just wondering, can we make sure that we lift up the market?
[48:35] Yeah.
[48:36] Yeah.
[48:36] Ask for these things and make sure that this, this transient reasonable for the revenue forecast?
[48:46] see what the yellow breakdown is, as far as it's different categories.
[49:01] With our break question, I will move on to the next slide, which is our proposal for other
[49:10] tobacco products. So the revenue growth option that we explored for the other tobacco products
[49:17] tax is a two-part proposal, so first we are proposing an adjustment to expand the definition
[49:25] of products, subject to the other tobacco products tax, so that it would now include
[49:30] a proposal will make it seem. This would include new nicotine products and product lines,
[49:36] such as nicotine pouches that are not currently captured in the county's tax space,
[49:42] state of Illinois and other states have already expanded their definitions to include these products.
[49:47] The second part of this proposal would revise the definition of consumable products, subject
[49:54] to the other tobacco products tax, and this would clarify the ordinance language to include
[49:58] all vapor products.
[50:00] So, regardless of nicotine content. And to ensure that the county tax is capturing all the products on the market, regardless of nicotine content.
[50:11] As far as methodology for both of these, we were reliant on our Department of Revenue's preliminary estimates, estimates which they performed by sampling invoices to estimate the total number of these products,
[50:25] order from Quif County retail tobacco dealers for both types of products. Our proposal currently
[50:33] assumes a 5% per unit tax on the absorbable nicotine products and a 20% tax per milliliter
[50:41] on paper products regardless of nicotine content. Both of our estimates assume a conservative
[50:48] compliance rate of 25 percent, which would generate additional revenue of 1.1 million for each
[50:56] of these parts, the proposals, so total it would be approximately 2.2 million dollars worth
[51:04] of additional revenue per year.
[51:16] So I
[51:21] guess, where does the compliance rate 25 percent come from?
[51:26] That came from our department of revenue,
[51:31] I don't know if that's their history with, again, if Tina wants to jump in, they gave us 25% rate of compliance and 50% rate of compliance.
[51:42] and some really low-guides.
[51:46] Yeah, we understand, so I don't know, that's typically the trend with incorporating new taxes or new rates or expanding the base.
[51:55] So if I think you know, I'm muted, so if you want to jump in there.
[52:03] So it is our experience with this type of product, not taxes in general, but these vape and
[52:13] And nicotine products that they're selling at these convenience stores and and those types of stores that
[52:22] they tend to
[52:26] They tend to sell products that maybe they get from non
[52:32] Compliant wholesalers and so where it's a constant a
[52:42] and, you know, we issue a lot of citations to them, but so 25% is just a pretty, especially
[52:52] over, you know, in the first couple of years, it's a conservative estimate.
[53:01] And do you think are the compliance rates that low for the tech to back up products, too?
[53:06] No, to back up products, well, I mean, we do issue, we do find a lot of illegal cigarettes out there,
[53:12] But it's definitely not as these these products are harder to to police, um, you know,
[53:23] they get a lot, it's, we work with the state of Illinois and the state of Chicago and,
[53:29] you know, we go to, like, these conferences and there's just a lot of contraband or I guess
[53:39] could would say that, you know, they get from other countries and, yeah, it's, you know,
[53:48] and with cigarettes, it seems like there's not as much non-compliance with cigarettes.
[53:58] these, these, these seem, you know, big with cigarettes. There's, there's a, you know, a lot of that cigarettes stuff.
[54:05] The cigarettes, it's a very, it's not so easy to sell cigarettes in a legal, without tax
[54:13] snapshot. It's, it's, it's pretty easy to catch people. There's a lot of regulation to catch people.
[54:19] But I guess I'm wondering about the paper for anyway, it's, I don't want to go too deeply in this because
[54:25] It's not that much money, but I mean, it seems to me, I just, I'll just say, it seems terrible policy to be taxing non tobacco products, the same as tobacco products, except if we don't really know which is which, maybe it's not a terrible policy.
[54:43] I mean, you know, we're taxing tobacco for a reason.
[54:47] So we don't want to tax evade products that don't have nicotine, but on the other hand if there's
[54:53] a lot of non-compliance, maybe once it's say they don't have nicotine, do have nicotine.
[54:59] So...
[54:59] I don't...
[55:00] I don't think Frank's on the call, but Frank in the Department of Revenue explains to me too that there's kind of like a threshold before you have to list on the product that it does have nicotine.
[55:12] So there might be some products that do have nicotine in them, but because they don't surpass the certain thresholds, they can get away with not having to.
[55:26] That's it. I think they're four get captured in this tax.
[55:42] Oh, Tina, did you have anything to add?
[55:48] No, I don't think so.
[55:50] Okay, thank you so much.
[55:52] I'm going to meet myself for moving on to the next slide.
[55:58] Then our box.
[55:59] Yeah, so this is just an update.
[56:01] for back and phone, it's more of a turning established
[56:03] the ARPA sustainability reserve.
[56:05] And the idea of that was to carve a stair
[56:07] stuff into our fiscal cliff, associated with the kind
[56:11] of the American Rescue Act Rescue Man program.
[56:16] We knew that the county would not be able to continue to provide funding
[56:20] for all of the ARPA programs.
[56:22] We had about 72 different programs.
[56:26] And so the reserve was created for the state
[56:29] purpose of reducing the amount allocated from it each year between 2027 and 2029.
[56:37] In order to establish which programs just be with sustained and engaged in many of the
[56:42] surveys and hyperlocal conversations and as a result of those conversations and with coordination
[56:50] within the office of the president about which programs we could we could sustain and
[56:55] opportunity, we were able to identify these 12 programs that you see on the right, and we will be sustaining those programs with funding as identified in that table and FY2027 will be the first year that we use the American Rescue Plan Act reserve to sustain some of our programs and we'll be allocating a 52.7.5.6 million dollars.
[57:22] Next slide.
[57:24] In 2028, we will need to start addressing the expected gaps between these estimated costs
[57:30] and the article deserves.
[57:32] At this point, we have a total projected gap that we have about $1.
[57:37] Between 2028 and 2030, and we'll be working closely with the departments to develop
[57:42] gap reduction strategies that include seeking to identify external funds from the
[57:48] landscape and other external solutions where we can
[57:51] generating revenues from the programs themselves,
[57:55] possible and leveraging county funds or scaling down initiatives
[57:59] when necessary, all with the goal of savings programs
[58:05] into the future.
[58:06] We believe we can do
[58:12] that side.
[58:16] That's for 2030.
[58:19] The identified gap is 23.3.
[58:22] But the total is 20 on the previous slide.
[58:34] That's right.
[58:35] We have $20 million in funding.
[58:38] That's $23.3 million in debt.
[58:42] About 50, 20, 30, 40, 3 million in debt.
[58:53] That's the bill.
[58:54] We were just going to spend the debt.
[58:56] I thought that was going to be $20
[59:01] million in debt.
[59:03] A little bit of debt to sell in the different allocations of the resources.
[59:06] If you wanted to kind of get a sense of what the cost would be.
[59:09] look at that 2027 table, and that's pretty consistent across those
[59:15] user's use of production, do some of the program.
[59:18] I thought, we out here, so we see some interfaces of the projected process.
[59:23] But those are going to change over time.
[59:27] Let's see get closer to that.
[59:28] We're going to find that.
[59:31] How does higher?
[59:32] Not as low as in.
[59:42] So I think now at this point, right, we've been incorporated
[59:46] those additional expenses into our long-term financial forecast.
[59:52] When you look at the tail end of our alligator sliders, we're at the Pollock.
[59:57] Let's see that, you know, it's hard out to pay for.
[1:00:00] It's loud.
[1:00:14] So, those are just some of the orderly updates. Next, we're going to take a look at our sales
[1:00:21] packs. So, I can only do run through just how our projections of sales tax has changed over
[1:00:32] the last year and a half. How we think legislative changes, what we're seeing have impacted,
[1:00:40] especially in 2025 and 2026 and whether or not we can expect to see the
[1:00:48] recent high-year growth in the county sales facts if that will continue in
[1:00:54] two-proutured years. So on the next slide here, this is just some of the
[1:01:01] phasor legislation that was enacted which has impacted a lot of counties collection.
[1:01:09] a lot of local governments collections in the state. I'll really focus on second and third pieces
[1:01:16] here. Public Act 101, 31, which is the leveling of the playing field act. So this altered this
[1:01:25] the utility occupation tax to be from a origin-based sales tax to like destination-based sales
[1:01:36] So there are many, many of most businesses out of state
[1:01:41] for paying some kind of revenue to the state of Illinois,
[1:01:44] but legislation that went into effect here
[1:01:48] had changed the way that the sales were taxed.
[1:01:52] So a lot of these businesses were just remaining use tax
[1:01:57] and so they wouldn't have to pay local to choose taxes.
[1:01:59] So, the leveling, the plain field attack, change that, so that out of state sellers would
[1:02:06] then re-remit the locally owned state taxes.
[1:02:11] And then in enacted in 2025 January, there was a change where we saw an inclusion of out-of-state
[1:02:22] sellers that have some kind of physical presence in Illinois, for example, a company that has
[1:02:28] rep or sales office in Illinois, but shipping products and customers from a warehouse that was
[1:02:34] outside of the state, they used to just pay like the use tax rate for the state of six
[1:02:40] on a quarter by passing the local rates, they would now be captured and also pay locally in
[1:02:48] most sales taxes. So these are two major drivers over the last five years that have impacted favorably
[1:02:56] counties, sales tax collections.
[1:03:01] And so on the next slide here, we wanted to take a look at
[1:03:07] counties, sales tax, or portion of the county sales tax versus the state's gross sales tax
[1:03:15] that goes into their general fund. So there's what's referred to as PL or permanent location.
[1:03:24] There's a part of the county sales tax that gets categorized as this, and this is for the
[1:03:29] state's website, from retail sales, from a permanent location, within the tax injury
[1:03:37] jurisdictions.
[1:03:38] So if you think of it as a more like brick and mortar stores, and if you look at the chart
[1:03:44] here, the volume of revenue is obviously quite different, but we wanted to show just an
[1:03:52] I have how we think the state's growth set of sales tax in our PL tax revenue has been relatively close and trending over the past five years.
[1:04:06] But then on the next slide, we have here including the CL tax payers, which is the changing location.
[1:04:15] from payers who have no permanent place of business within the taxing jurisdiction, but they
[1:04:22] do conduct intermittent retail sales within the jurisdiction.
[1:04:27] So you can see from 2021 here, this revenue has been trending higher over time.
[1:04:36] This is what we think is from what we understand is the impact of revenue from the recently
[1:04:45] active legislation, and so in 2025 you can see it really jumps up and as continued to 2026.
[1:05:01] This slide here, we're looking at the seat-out chairs.
[1:05:09] So the data that we get from the state, we've been seeing pretty steep increases in these CL taxpayers, especially in January of 2025, when public acts, 1931, to effects.
[1:05:27] So you can see from a nominal standpoint chart on the left, quite a jump, a little scuffling,
[1:05:36] the average monthly revenue, and we're also seeing increases in 2026.
[1:05:43] And then on the chart on the right here, this is the CL's as a proportion of the total
[1:05:50] county of South South Facts. So, you know, prior to 2025, this CL revenue made up about 15-20% of the
[1:06:01] county sales tax. We've seen that really jump up in 2025 and continuing to increase in this latest
[1:06:10] fiscal year, or is now in the range of 30-35%.
[1:06:19] Okay, that's a question. So I guess we should
[1:06:23] But so there's, we've sort of, it's delayed response to the legislation.
[1:06:28] I guess the thinking in is that there was just so much of this had these sort of
[1:06:33] in-state presence that it wasn't didn't really bite because it's all those maps.
[1:06:37] Is that kind of how we should think about this?
[1:06:40] Well, I think, you could think of it as, like, the second legislation of 2025.
[1:06:46] It's like a fan of a piece of surfing.
[1:06:50] It was both UCDL stacks.
[1:06:52] There was all these piers who were paying,
[1:06:55] they were paying like state tax,
[1:06:57] but they were paying because of like the definition.
[1:07:02] That's these all of these locally in those stacks.
[1:07:04] That's it.
[1:07:04] I think we're there.
[1:07:05] They're going to now really capture my account in the last two years.
[1:07:12] The legislation was for it.
[1:07:14] in the middle of it.
[1:07:15] But could they ever capture it?
[1:07:17] What was the motivation of it?
[1:07:19] First, 2026.
[1:07:21] And I was through a food service management,
[1:07:24] through this, you know, that's right.
[1:07:26] So I think the initial estimates that we had for the service
[1:07:30] management was pretty minimal.
[1:07:32] I think it was about the million dollars annual.
[1:07:38] You know, I think that's we got a couple more months of data.
[1:07:41] we could try to see if that is true or if there's, I think it's still like compliance from the previous
[1:07:49] year. So we'll have to keep, you know, only polar reports were able to kind of get a little more
[1:07:56] see if there's new businesses that come on and imagine these, and these downloads in the state.
[1:08:06] So is this suggesting to me that the impact of the 2021 legislation was much smaller than
[1:08:14] 2025. Yes. Have you talked to the owner department of revenue about that? So I'm worried that
[1:08:20] there may be a changing definition of CL and PL because I know for sure 100% the 25 legislation
[1:08:30] was to fix unanticipated consequences of the major legislation which was passed in 2021.
[1:08:39] So I'm not familiar with these codes and what's fallen into them over time.
[1:08:44] the sale, the big, it's my understanding that the real big change came in 2021 and everything
[1:08:52] since then has been clicking on unanticipated consequences in the 2021 legislation.
[1:08:59] I see a fact. Yeah, we can reach out to the state to see you again.
[1:09:10] So then if that's the case, what explains the jump and revenue,
[1:09:20] I think we need to know more about the definite, because I'm thinking, this is good, but the definition is changed so much that orange is incomplete.
[1:09:34] Right.
[1:09:38] No, all right. So I think I think I think orange was much bigger than it is using this definition of CL.
[1:09:44] I think the definition of CL has changed over time. Our highest being used on that form.
[1:09:50] Yeah, I understand that.
[1:09:52] But I don't know enough to, I mean, I just think it's cool.
[1:09:56] Yeah, sure.
[1:09:57] Yeah.
[1:09:57] If you need to visit soon.
[1:10:00] For instance, it's like, like, PLs are now being, I've not familiar with the PL and see up what I do know is that 2021 try to change a situation as follows.
[1:10:13] Amazon had a warehouse in Indiana and it was being shipped to Chicago.
[1:10:20] And because it was I did, the tax rate was lower than if it was in Juliet, and it was shipped to Chicago.
[1:10:28] So, some, I'd be 4, 2021, the Julia distribution center was picking up a higher tax
[1:10:38] rate than the, based on product, I mean that's how I'm as on how they're stuff and more
[1:10:45] prices and stuff was really, really complicated, but I don't want us to say anyone
[1:10:53] And it's because I, but I'm just, it's always been my understanding that the 2021 legislation
[1:11:03] was the big change and all this other stuff is at the margin, yeah.
[1:11:08] I mean, I could be wrong, but that's, that's what I've always worked for.
[1:11:14] Yeah, I think that's sort of asking for it seems like there was a gaming that went on because of this sort of rule.
[1:11:20] if you had some insane presence or something, right, that would be, and if it was three
[1:11:24] retailers with the Amazon's of the world, we weren't supposed to be like buying their online stuff,
[1:11:28] right there couldn't help that. And so I'll explain the legislation then.
[1:11:34] I think really, I don't know if I really sure, like I think it says there's changing location and
[1:11:39] temporary location. I don't know how accurately they may take those codes, but we've kind of
[1:11:50] are being captured.
[1:11:54] So I think, right? Like, yeah, I don't know why. Why don't they just
[1:11:59] call it online? Because of Andrew doesn't submit their tax return and say, I got this
[1:12:05] amount of sales from an online scammer, and I got this amount of sales from somebody who
[1:12:09] looked in the door. I mean, there was tons of online sales that were being captured before 2021.
[1:12:15] I mean, the 2021 was to pick up and be in captured and what was being captured at the state
[1:12:22] read, but not the work for it.
[1:12:27] So it's a lot more complicated and think of the intent.
[1:12:32] It's a tax return.
[1:12:34] You know, it's not like you're serving martial fails and like, you know, where did your
[1:12:38] tests come from and what's shot at the diamond and did you mail it to them?
[1:12:41] You know, and well, we of historically no one had gone when sales were being captured before
[1:12:49] 2020, most of them. Again, this is all just small, the tail is compared to what was
[1:12:55] already being proactive, exactly what was happening. I think we've got this surge in wrapping
[1:13:00] there. Yeah. So, it's got to be something that explains that right. So, some of these came
[1:13:06] Yeah, because of the tax, the tax not even applied to them.
[1:13:12] We'll start.
[1:13:13] And then you go back.
[1:13:14] So it would have been 20, 20 compared, 20, 20 compared to 2021.
[1:13:18] And we talked about this on the phone.
[1:13:20] Then 20, 20 was so messed up because of COVID.
[1:13:23] So we don't know what, how big of that jump was before.
[1:13:30] Yeah.
[1:13:31] 20, 21.
[1:13:32] And the Dow is not playing the really good back.
[1:13:34] And
[1:13:37] I mean, every time you do a difficult business analysis, it improves, and the more
[1:13:42] data you get, the more data, you know, the more a prison and more than you understand.
[1:13:47] And I just, I think we're still in it.
[1:13:49] Very right to tell us, even though this seems like a nice clean story, but it probably isn't.
[1:13:55] It's probably more complicated than this.
[1:13:56] But to me, the scene I thought, okay, well, the sixth place isn't that makes all make sense.
[1:14:01] Yeah, but maybe it's more complicated.
[1:14:06] This is a nice explanation, right?
[1:14:08] I mean, you're showing the things we're stable at following the general pattern with the
[1:14:13] PLs, right?
[1:14:13] The growth of the things in the PLs.
[1:14:16] And one question I have is, you know, are we done with the growth in the CLs that kind of
[1:14:21] jump in a head of slide year?
[1:14:23] Yeah.
[1:14:24] But it looks like it.
[1:14:25] We may be hitting my toe, but that's, it does seem that that's where it grows coming from,
[1:14:36] as well as occupant, some cool figures in. Yeah, yeah. So if you guys, you know, this slide here
[1:14:42] really shows as far as like the annual change and the monthly revenues for the, you can see the
[1:14:49] CL's is compared to the our location and also how that looks on the state level 2 in RPL in the states.
[1:15:00] You know, tracking pretty close, but yes, just closing in 2025, that legislation.
[1:15:11] And then, you know, we think it's moderating now. And this is like what we, you know, once,
[1:15:19] as far as like getting our forecast rate and like our dummy variable, which we have for our model,
[1:15:26] not assuming that there's going to be a continuation of growth in the legislation, making sure
[1:15:34] that that does reflect it in the model, and it's going to be a we're not expecting in this
[1:15:40] low-row in perpetuity and cheer.
[1:15:51] One way, by the way, people back in the slide, to maybe try to think about whether there's any room
[1:15:56] to run is that you're getting 35% in the last few months
[1:16:00] about somewhere in the 30, 35% of your revenue from these CL.
[1:16:06] So trying to compare that with what's
[1:16:08] share of retail sales around line versus in-person.
[1:16:11] That should be a statistic that's out there
[1:16:13] and the two should line out.
[1:16:15] So if it is about 35% of sales,
[1:16:20] then you've sort of run
[1:16:22] your course here.
[1:16:23] But if it's 40, maybe there's a little bit more,
[1:16:25] there's some people that are still out there, not that kind of thing.
[1:16:31] So did you go back and see if somebody was at the PL at one point and became a peer?
[1:16:43] I could say just I've caught where there's been one month.
[1:16:48] For there's been months of the business being categorized to PL and then they change.
[1:16:55] So the next one to be a CL, but then it seems like it's switched back and it was kind of like a one off like maybe an error the way that was entered that doesn't seem to happen too often now it's more so
[1:17:09] Observing more CLs coming on line with each dispersion.
[1:17:18] But not so much, you know, switching between the two category categories.
[1:17:25] There are like businesses too, where they'll have PL lines, but then they'll have
[1:17:32] CL line too, come on at some point and it seems like, you know, there's just like
[1:17:38] other part of, like I said, the way that they're submitting a class by, so there'll be two
[1:17:44] requests for the business of the CLNTL, that we've seen as well,
[1:17:51] but not so much of like operating
[1:17:53] on the big categorized one and then switching to the other, it's the out, it's the out ones.
[1:18:00] So what do you get from the state?
[1:18:04] So lecture, when these businesses were just kind of new scents,
[1:18:10] were you getting any information from them?
[1:18:13] Well, I think we've only been getting this data
[1:18:16] with like the last, I think maybe two and a half or years.
[1:18:23] So before that, we weren't really getting any,
[1:18:26] because if that's, that's meeting.
[1:18:29] Would you have, even in the last year, or 2025,
[1:18:33] would on the file you get from the step, you would just be getting businesses that have that could continue.
[1:18:44] Thank you.
[1:18:44] We tell this little detail on the issue.
[1:18:46] So if they were paying the use tax they would now they wouldn't show up on a file for you.
[1:18:51] Even though you were getting a distribution from the waste tax to small as it may be.
[1:18:56] Like from the government's government.
[1:18:58] There'd be a phone portion.
[1:19:01] But you don't have any transparency on whether they were new businesses or they were paying
[1:19:09] news tax all of a sudden they just come on.
[1:19:12] Correct.
[1:19:12] I will.
[1:19:13] We've made assumptions over the last couple because the way that we when we talk to the
[1:19:21] state we ask like how could we tell what are the new word of the new revenues from the legislation
[1:19:27] and we were informed that.
[1:19:29] you should track the CLs. And like the, essentially, if the new businesses that come online in a month
[1:19:35] is probably related to the most recently enacted legislation. So if you would track to
[1:19:44] see each month when you pull, if there's like a new business and account code, and if it's under CL,
[1:19:51] So, then we could kind of tag that as in the next slide.
[1:19:58] is it possible to work?
[1:20:00] A question was asked and files answered that the CL, some of them were panic use tags, but they're
[1:20:10] new to you. So, to you'll be in total below the CLs. Yeah. But that doesn't mean that they went
[1:20:18] And yeah,
[1:20:24] because I'm a bit troubled by this impact of 2020, five because it shouldn't be that large in part to 2021.
[1:20:36] But if there's,
[1:20:40] if a whole bunch of new companies are showing up in your file,
[1:20:45] because they're paying county tax, not because they're all the sudden paying tax,
[1:20:51] that they were always paying the use tax. They just now fall into your bucket.
[1:20:57] So I guess part of that conversation is that the language matters, like online taxes,
[1:21:04] when we use the term online sales, the taxes will be impaired. They just won't be
[1:21:09] impaired at the higher rate for the county to get. I think that, I mean, that distinction
[1:21:16] is really important. Yeah, because that's the game going back to that
[1:21:23] intent of the legislation was to buy the local taxes. Whatever it was and could
[1:21:29] whatever it was in Chicago to be allowed to be collected on sales because up until
[1:21:35] that point there was no legal authority to collect anything one at six and an order.
[1:21:41] Yeah, I think we should get back out.
[1:21:43] So I was going to hand the credit.
[1:21:46] Yes.
[1:21:46] Thank you.
[1:21:47] Thank you.
[1:21:48] I think it would be helpful for me to.
[1:21:51] I'm assuming an example of what you consider a C.L.
[1:21:54] Is that more the pop-up phenomenon that we're seeing?
[1:21:57] There's companies.
[1:21:58] Organizations are coming in.
[1:22:00] Just standing up temporary.
[1:22:02] Pop-up locations and they're up to the next state.
[1:22:05] This is more of like like the facilitator.
[1:22:09] Okay.
[1:22:10] So, like, if you go online platform, yeah, like you're having a sense.
[1:22:16] Yeah.
[1:22:19] So it's strange to call them.
[1:22:21] See, yeah.
[1:22:21] That's right.
[1:22:22] Because that's not going to be what's going on.
[1:22:26] It's not something changing their location.
[1:22:28] This way is the question, because I'm thinking it's more, there's a growth in the pop-up type venues.
[1:22:34] Happening specifically in Chicago.
[1:22:36] I'm thinking, is that a driver?
[1:22:37] But you're saying that's not the audience.
[1:22:41] Okay.
[1:22:41] I think like what we're trying to highlight here
[1:22:44] is that's the detail that we get the state of part
[1:22:47] is an exactly conducive for performing in depth analysis
[1:22:52] on how much of our, on all of our sales tax
[1:22:57] is related to online sales.
[1:23:00] What we have available to us are in the most group.
[1:23:06] Like, find this level of detail that is provided to us are three types of categorizations.
[1:23:12] EL, CL and TL, and none of them are very well defined.
[1:23:17] So we're using the best data that we can in order to identify the information and estimate
[1:23:23] what the components of the legislation are doing here.
[1:23:27] And I think they've done a really good job of putting that information together, and so
[1:23:31] a pretty compelling story about, you know, how the legislation has impacted those categories.
[1:23:39] Now whether or not those categories are accurate, whether those categories are a good
[1:23:43] representation of what online sales are, I don't think we could do this to that question.
[1:23:49] But we can say that, you know, ostensibly, right, that the legislation has had a pretty significant
[1:23:55] impact on the sea all tax boyers we have largely attributed to public intelligence.
[1:24:03] Yes, so the sales are a subset of online, and I think it's probably for us,
[1:24:09] as you should talk to, or I can't talk to some orders that work. And I think there's very little
[1:24:20] opposed legislation, I'd throw to close any more gaps, loop holes, whatever. So I think
[1:24:27] this last push is going to, like I think there was one thing that didn't have something
[1:24:32] marginal. But so I think now I still think it could kind of be indolivered, our taxab could kind
[1:24:45] I think you'd be hard plastic by something that's not which goes back to like the analysis of the sales tax that you were like avoidance.
[1:24:54] I'm not sure that you
[1:24:56] There's a way to avoid pain
[1:25:00] That sales tax anymore, because men and people's good. Yeah, you just don't have enough money to buy, you know, you have to trade off of what you're going to buy.
[1:25:14] I spoke back to the forecast and what the economy's going to do.
[1:25:18] It's a bit of a fact, a little bit of legislation for that.
[1:25:22] Very nice.
[1:25:27] On this next slide here, it's a, we have like a break out of just, you know, the CL, the pedals, the approval could.
[1:25:37] sales backs, looking at like six months, like just in seeing the year over your changes.
[1:25:47] And so, you know, as what sticks out on this is CL, as you can see, how much significantly higher the year over here, sales have been as compared to the state, the PL, the PL, the Cook County.
[1:26:06] But you know, when we put this together, we were using January to be both data for 2026 all the way on the right there.
[1:26:16] And so you could really see the CL coming down, as we think that's starting to moderate, at least coming closer to what it was before 2025.
[1:26:34] Is it part of say that this is given us some insight into the impact of inflation versus something else?
[1:26:41] Because the growth has not been very significant in the P.L.
[1:26:46] Compared to what inflation?
[1:26:49] Oh, but it's gone up again.
[1:26:53] Hmm.
[1:26:53] In 2026.
[1:26:54] Yeah.
[1:26:55] It was an end.
[1:27:01] It's possible that growth could have faster in the C.L.
[1:27:04] that's where the sales growth is.
[1:27:09] So it could still continue to grow there a little bit faster.
[1:27:13] Yeah, I think we would all agree that e-commerce sales are growing in a faster place than
[1:27:19] physical locations sales, right? So I think we're seeing this, that's somewhat reflected in
[1:27:25] this information, but also the change in legislation.
[1:27:36] So on this next slide here, we're
[1:27:38] I'm highlighting how the annual sales tax projections that we produce have changed over time.
[1:27:45] Going back to April of last year.
[1:27:49] And so, you know, just following the colors of the rainbow here,
[1:27:53] you could see that our forecasts in 2025,
[1:27:59] they were pretty close together in the out years,
[1:28:02] but for 2026 and for 2025, they were gradually increasing.
[1:28:08] And then in the more recent sales tax forecast for April and June, you could see that the base in the near term of what we're projecting has really increased as the 2025 and 2026 collections have just been much higher than we were projecting prior.
[1:28:32] But if you look at the out ears here in the table,
[1:28:37] below, you could see the U over your changes in 28 through 2030.
[1:28:43] It's pretty conservative.
[1:28:45] You know, a red around 2%.
[1:28:49] It's more so in 2026 that we've seen such a high increase
[1:28:54] in the U over your projections.
[1:28:56] And that's what's been our forecast for the sales tax
[1:29:00] the out years.
[1:29:06] And then the next slide is just the same thing. It's more of a monthly clicker
[1:29:10] tips though. Along with some black dots here, so in the actuals. And so you can see in the
[1:29:19] the left side of this subline chart, the actuals have been higher than what we were
[1:29:24] rejecting over time. We were producing earlier forecasts. And so that's what's
[1:29:31] We got more data and collections when we was driving the more recent forecast of the sales tax
[1:29:39] for the out years, but for the out years, the projections kind of follow a similar trend.
[1:29:46] It's just that the base has been hired as a result of more faithful references.
[1:30:00] That slide here. We wanted to just show some of the recent outputs from our direction model.
[1:30:08] You know, one reason why just showing what are the different coefficients, ingredients that go into the model, you know, we factor in
[1:30:20] So to see the quality, we include a dummy, a dummy vehicle, which we update each time you're on the phone fast.
[1:30:30] Trying to adjust for a resupply legislation.
[1:30:33] So that's sort of how it does not assume that we'll see growth into the out years.
[1:30:39] And then we have the different economic indicators that we've used going back to the last year,
[1:30:46] which we use retail sales for the Chicago MSA, as well as number of employed persons and number of households, both in the MSA to set the macro economic floor.
[1:31:02] And so, your model here, as far as the adjusted art square shows that about 96% of the movement in the base is reflected from the coefficients here.
[1:31:16] So I did, I'm sorry.
[1:31:19] Well, I was just going to say, we talked about this a bit in the briefing.
[1:31:24] I just think there's a lot to dig into here.
[1:31:27] And I'm going to suggest that this, I'm going to withhold my comments,
[1:31:32] but accept the request that we had explorers,
[1:31:37] but let's discuss it.
[1:31:41] It is a lot of discussion.
[1:31:43] And I was, you know, just, this is something I had kind of asked for.
[1:31:47] So if that comment on a little bit, one thing is that the coefficients are quite stable in each of the different forecasts.
[1:31:55] And that's, that's a good thing that applies to the model was like fundamentally changing.
[1:32:00] But the underlying actors were, right?
[1:32:03] So in terms of thinking about all of these things, there are sort of these one-off and slate jumps.
[1:32:08] But it is remarkably stable.
[1:32:13] Another way to sort of see that actually would be to,
[1:32:17] if you go up a couple of slides, back a couple of slides there.
[1:32:22] So if you look at the rainbow chart here, which is very cool,
[1:32:26] but the slopes of the lines in the out-years are basically all the same.
[1:32:31] So essentially, in all of your forecasts,
[1:32:33] you're predicting this as like a one-top.
[1:32:36] young, right, each time each updated forecast, that one time jumped, got a little bit bigger,
[1:32:41] but the slopes in all those out years are basically all the same. And so it's sort of saying
[1:32:47] all along your models, you can see that's one time thing, and it still is. And so that's the stability
[1:32:55] of the coefficients are certainly counting to that slope.
[1:32:59] Yeah, to your point about, for one period
[1:33:01] where there was some instability, that was, I think definitely an April, if you look at
[1:33:07] That speaks jump up or jump down, I guess,
[1:33:12] before kind of perverti back to closer to where it was,
[1:33:16] before in, you know, same with the retail
[1:33:18] that really jumped up to from the previous model
[1:33:21] or come to point it back down, it did happen.
[1:33:24] It is interesting, but the intercept jumped up.
[1:33:26] So it's like, you know, you're getting weird things
[1:33:28] that could just be kind of about setting each on that, right?
[1:33:33] Yeah, you'd have to, yes, spend a little time with it,
[1:33:36] but I don't know,
[1:33:37] I feel like the picture is helpful because that's your, your, your forecast from these coefficients and you really are seeing quite a bit of stability, especially, yeah, so you get a better sense of that trade off between, okay, a couple of things jumping around in that one period, but not like the slope changed a lot and then that would make you think like, oh, the model was saying, right, I was thinking about this is like a forever thing.
[1:34:00] So we want to, yeah,
[1:34:12] so we're not going to lose the portion on the fails facts.
[1:34:16] Yeah, I can shade off once back and I'm going to look forward to taking the session.
[1:34:25] So another part of the IRFC aside from analyzing revenues in our forecast is coming up with preliminary recommendations to be specific to see
[1:34:39] of OVU's floor August 1 and so that's what we're looking at today.
[1:34:46] And so one of the recommendations we have here is, you know, something that we've
[1:34:51] recognized previous years but continuing to think about fiscal sustainability from our but
[1:35:00] Dean mentioned earlier, you know, we're thinking about the allocation of the reserves that we have for our programs, continuing to collaborate with them in the coming months and a year, thinking about different funding options for the programs that are in place, and if they will continue to remain, it's a down year's afternoon basis.
[1:35:25] The next recommendation is a value-weighting of a witty of suffice used by the county and
[1:35:33] exploring potential modifications to existing revenues that are in the county's budget and federal fund.
[1:35:43] So, as you can see from the alligator chart here that was referenced earlier in 2027 and
[1:35:49] the out years we're looking at some pretty significant deficits in general fund. So, you know,
[1:35:57] as the county would maybe look at different scenarios to potentially modify taxes that are
[1:36:04] currently in place in general funds, you know, assessing the validity of the methods used by
[1:36:12] county through the experiment that these are sounds.
[1:36:18] Is this some,
[1:36:22] are some of the ones that we've talked about today, the examples of what we've
[1:36:26] fallen under this umbrella?
[1:36:28] Yeah.
[1:36:29] I don't think quite kind of can continue like that as well.
[1:36:32] So the value is the validity of methods.
[1:36:35] So I guess I'd like to explore that a bit further.
[1:36:38] I'm not mechanism through which that happens because you know we brought up the last
[1:36:43] to be using additional research surgeon. The focus is on the methodology, which we talked
[1:36:49] yesterday. How much direction on the methodology and questions
[1:36:57] answering the work sessions? Are you guys going to be able to provide for us to fulfill
[1:37:02] that responsibility?
[1:37:09] And the last recommendation, I'm sorry,
[1:37:14] I don't see any reason to strict this to the general fund.
[1:37:21] So I don't know if that's implied here or not, but I guess any revenue too.
[1:37:27] I mean, I think the health care revenues are like a, that's largely farmed out.
[1:37:33] But, you know, any certainly any tax rate, it seems, we should have a consistent amount of knowledge.
[1:37:40] I think I don't know if you want to chime in, but the general fund has a lot of our home rule taxes.
[1:37:49] So kind of starting there, I think was some of the thinking behind just name the general fund.
[1:37:56] I don't think there are any taxes outside of the general fund.
[1:38:00] Yeah, maybe like a special purpose fund, but I can't think of anything significant.
[1:38:08] here. Certainly not at the hospitals, right?
[1:38:14] So that so it's limited to
[1:38:20] this rapid edition.
[1:38:22] This is a limited tax. It's really not talking about, I guess, fees, finance, as well, but not for justice left out there.
[1:38:33] Sometimes you do things do come out, but that's fine. If we want to restrict it, we want to focus on
[1:38:40] it's not my sense.
[1:38:44] Yeah, I think that would tell us a lot of
[1:38:47] preference here.
[1:38:51] The feed is
[1:38:54] food. So if you
[1:38:56] will feed, right, it should be consistent with the cost that we're
[1:38:59] preparing. I need to know how you wish it to make sure cost. I
[1:39:04] should. Yeah, so that that's yeah, that's not something that
[1:39:09] is for consideration. Yeah. Well, like what we're doing, what you're
[1:39:14] by the gambling stations.
[1:39:20] That's, I guess it's the tax, I'm not sure exactly what separates
[1:39:25] the tax from a fee in that point, right?
[1:39:28] Yeah, that's what I'm saying,
[1:39:32] but okay, yeah.
[1:39:41] And then this third recommendation is to establish a protocol
[1:39:46] to evaluate new and alternative revenues sources, not in county's budget with the IRFC to address the out here of structural deficits in general fund.
[1:40:00] I'd like you guys to think about this, but more give some more direction at the next meeting. So, again, separating policy from methodology and the role that we're supposed to have is a legal consideration or an implementation feasibility considered more policy or methodology.
[1:40:22] So, I would like to clear understand the expectations that you guys would have of me.
[1:40:30] Yeah, I agree.
[1:40:39] And so, just after August, there's a company in a company that's very direct to the
[1:40:47] nations, they'll also include the kind of deliver of timelines for these three items.
[1:40:55] And that will get submitted to the board, September.
[1:41:01] So we'll be working to draft this work and I mean weeks and you know, wouldn't want to
[1:41:07] And back to incorporate that into the report, so that we can, yeah, I have, make sure there's clear guidance and direction that's seen forward.
[1:41:18] That's good.
[1:41:21] And then leading calendar just some of the upcoming key to have another one. Next month on the 26th.
[1:41:29] And then we're break until October, we'll be presenting the next long term forecast and need a second of your recommendation for 2027.
[1:41:44] So I'm wondering if we can move the meeting on the 26th book because I'm teaching on Wednesday nights now.
[1:41:50] And the October one as well as on Wednesday night. So I'm going to be able to attend either of
[1:41:57] those.
[1:41:57] Yeah, we could talk after this, see if there's a better date at, let's see if everything
[1:42:04] all of this stuff.
[1:42:10] If you have a, if it's better, it's better, so I didn't check my calendar.
[1:42:14] Uh, I think any other day is...
[1:42:18] Good thing.
[1:42:20] Well, if you all have a chance, I have a chance.
[1:42:25] Uh, but, uh, share that, please, our presentation.
[1:42:31] Thank you.
[1:42:32] Thank you.
[1:42:35] That's right.
[1:42:36] Among the attendees public comment.
[1:42:38] We have any public speakers.
[1:42:42] No.
[1:42:44] We do not have any registered public speakers.
[1:42:50] Can we do we have any public speakers?
[1:42:54] We have no registered public speakers in the chat box.
[1:42:59] Thank you.
[1:43:00] The next item on the agenda is a term.
[1:43:02] is there a motion to adjourn?
[1:43:06] I'll make the motion to adjourn.
[1:43:08] Is there a second?
[1:43:10] I'll make the motion to adjourn.
[1:43:11] Great.
[1:43:11] The motion to adjourn has been moved by Commissioner
[1:43:14] Bavila and second by Commissioner Favila.
[1:43:22] All those in favor of signifying.
[1:43:26] In the opinion of the chair, the eyes have it.
[1:43:29] The meeting is adjourned.
[1:43:30] The next meeting will be
[1:43:33] Wednesday, August 26.
[1:43:36] 20 for the 6th standard.