KANKAKEE — Despite state law, Kankakee is refusing to release settlements with other public bodies in a controversy over sales taxes — at least for now.
Last week, the City Council unanimously approved a series of sales tax-sharing agreements with the Chicago-area Regional Transportation Authority, the Cook County Board and sales-tax-sharing partners. Aldermen discussed the agreements in closed session.
Mayor Chasity Wells-Armstrong said last week the matter could not be discussed yet because of pending approvals from other governmental bodies. Council members contacted said they were instructed not to publicly discuss the agreements.
After last week’s council meeting, the Daily Journal submitted an open records request for the documents. On Wednesday, the city responded it was delaying release of the documents for at least another five days.
In denying the newspaper’s request, the city cited an exception to the Freedom of Information Act allowing it to keep secret preliminary drafts, notes, and other records in which opinions are expressed.
Yet, the information law states, “All settlement and severance agreements entered into by or on behalf of a public body are public records subject to inspection and copying by the public...”
It was unclear why officials considered agreements already approved by the city “preliminary.”
Wells-Armstrong didn’t return a message for comment.
At last week’s meeting, Wells-Armstrong noted the cash settlements would not harm the city’s budget as money collected from the agreements had been placed in a separate account as it became clear some of the tax-sharing agreements would be challenged.
Tax-sharing agreements, started in 2000 under Mayor Donald Green, had been a staple of the city’s budget. Years later, the RTA, Cook County and Chicago began to question the agreements.
The recent settlements were for only selected sales-tax agreements, not the entirety of the program, which netted the city’s budget $2 million to $2.5 million annually during much of its existence, city officials said.
Through the program, online retail companies from outside of Kankakee would establish offices here and then run purchases through those offices. The offices were barely manned and the bulk of the companies’ operations were elsewhere, mostly in places with higher sales taxes.
Because of these agreements, other areas lost out on potential sales tax revenue.
Under the tax agreements, the transaction was credited to Kankakee and Kankakee County and the two governmental bodies would receive sales taxes. At the time, the city had a 6.25 percent sales-tax rate, of which 5 percentage went to the state and a quarter-percent to Kankakee County.
In return, Kankakee would rebate a portion of its 1-percent take back to the company.
The Kankakee sales tax rate is now 8.25 percent, which would make it less competitive for such agreements.