Anarcho-capitalism

I lived in Gurnee, Illinois for years — up until a few months ago. Gurnee has been one of the largest retail villages in the Midwest and even the US, taking top ten in overall spending at many Christmas seasons. I was a fan of Gurnee before I realized the downsides of a city that looks clean, is occupied by middle class families, and always focused on education and public safety. It wasn’t until I ran a failed retail store focusing on young adults and teens that I realized that not all is perfect in the town I called home. Once my store failed, I moved to the town over — lower taxes, less government intrusion, and even better: I wasn’t supporting a growing monster.

Gurnee is one of those towns that sprung up out of nowhere. Located on the biggest highway in Illinois, Gurnee is located halfway between Milwaukee and Chicago. It has become the hub of shopping for not just locals but for people looking for a deal: the large mall in Gurnee was once considered the outlet mall, but now the outlet stores charge more for products than the actual non-outlet stores elsewhere. Supply and demand at its finest. Gurnee is also very close to the local Navy base (Great Lakes Naval Base), and every naval cab company brings soldiers by the hundreds and thousands on pay day (the 1st and 15th of the month). This influx of capital has allowed Gurnee’s village spending to grow, especially with the dollars available from the “public servants” nearby. Even tourists visiting Chicago an hour away made it a point to visit the outlet town that was no longer outlet priced. Everything is a deal when there are 50% signs everywhere (of course the original price before markdown was often 30-40% higher than other regions charged).

Gurnee now has the highest sales tax rate in the county — 7% rather than 6.5%. This additional 0.5% increase was created based on the idea that the retail stores added a huge cost to public services: roads, police, fire and ambulance services, and all the bureaucracy that comes along with these services. The Village of Gurnee built some beautiful buildings for all these services — they look more like megamansions of Beverly Hills than the typical buildings of authority most are used to. Green grasses, fountains, statues and plaques abound.

The sales tax had unintended consequences, though. As retail minimalls opened throughout Lake County, more people found a significant savings shopping elsewhere. If you’re spending US$1000 on a TV, why pay the extra $5 in additional taxes? The added supply of money in the village also made prices rise compared to the smaller town retail sectors. My own failed chain of stores charged nearly 10-20% more in Gurnee than in the other Lake County local, not including the tax difference. The regulatory costs of Gurnee were much higher, too, including the licensing and annual inspections that many villages find necessary for the “safety of shoppers.” Most of these inspections were eyewashes, 10 minutes of nitpicking before you paid the piper.

The Internet has also hurt retail in the Midwest: why pay 6.5-9% in sales tax when you can get free shipping from one state over, with UPS delivering next day ground? Why waste 6 hours of time looking for your product and dealing with chain-store unfriendly salespeople when you can find what you want in minutes at Froogle or Amazon? I knew the writing was on the wall, and rather than put good money into a bad business, I decided to fold up and move on. Other retailers took out commercial loans to get through what they thought would be a temporary slowdown.

The Village is now realizing budget shortfalls, significant ones at that. For a small village of 30,000 people, a budget of US$45 million is outrageous I’d say. New schools, new public buildings, new parks and new infrastructure does not serve the people as well as the promises said they would. The retail downturn has really affected income, so the village is now looking for ways to solve their problems.

A day or two ago my old village had their debates over what to do, and the local Pioneer Press covered it. The only “respectable” politician in Gurnee wants to cut government jobs by 15%. No one quoted how many jobs were added in the past 10 years, but I would guess it is much more than that figure considering how full the public services parking lots are. The idea was shut down by the rest of the politicians who know that cutting jobs could mean cutting their jobs, too, when the polls are open.

The Village Administrator thought the best solution was new taxes: an additional 1% restaurant tax, plus some other fees for businesses and residents. The restaurants in Gurnee are the last booming industry, with 2+ hour waits on a weekend for access to overpriced and low nutrition food. A 1% tax would harm the industry quickly as the rest of the county has better restaurants with better prices and services. 1% may not sound like much, but the restaurant industry would have to pass on additional costs to cover the 1%, including the extra paperwork and accounting necessary. There are always more audits with more taxes, and one needs to plan for these situations, too.

The News-Sun Online goes into greater description of some recent budget increases, showing consistent 2-digit increases in various public services. Rather than make do with what they had, the local village wanted to take advantage of the temporary revenue increases during the credit boom, but now doesn’t know what to do with the credit bust. Gurnee’s foreclosures are on the rise, and the housing bubble is already here with more homes sitting around unsold and overpriced. Most of the new houses in Gurnee are hard tents — huge homes made of 2×4s and siding, nothing like the homes of the 60s just 2 miles away. Cookie-cutter hard tents won’t last in value when real homes can be had for 30-40% less.

Gurnee thinks they can pass on these additional costs to the rest of the state and country as they tried for (and got) a special census so they can prove they have more residents than previously estimated. This would pass on their over-spending to villages nowhere near them — I’m sure the people of Oklahoma and Florida will be happy to pass on a few extra cents a year to cover a village with no end to spending increases. Even moving my home might mean I’ll still have to pay something to cover this village, not counting all the other hundreds of towns around the country that qualify for additional federal and state financial help.

The best source of revenue increases, though, comes from real force — using the police to inflict harm on non-violent non-criminals. When costs go up, police enforcement of ridiculous laws do, too. A few weeks ago I was pulled over 4 times in 20 minutes for an expired license plate. I had proof of the State of Illinois’ error in making the new tag sticker, but I continued to get pulled over and harassed for what was not my fault. 4 times in 20 minutes for a sticker that was the wrong color by 1 month. If it wasn’t for my obvious disdain for the law (I told the officers I would never accept a ticket, I’d rather get arrested, booked, processed and released), I would have had 4 $150 tickets for driving illegally. I don’t accept tickets, I prefer the arrest.

With increased “criminal license plate” enforcement, there is also enforcement of other ridiculous laws. The police are performing more liquor license stings by sending 20 year olds with beards to try to buy alcohol from the local restaurant businesses. The penalty for breaking this law is losing your license, but Gurnee actually uses it as a secret tax — they never close anyone down. Many of these restaurants are ones I attend on a regular basis, and none of them can afford the tax but pay it happily. Better to pay US$500 twice a year than lose your business. Many of these restaurants have been charged with the same crime over and over and over again.

If a 20 year old wants to drink, they’ll drink. Many restarants happily serve them — they’re the ones with daddy’s credit card and the ability to spend. The US$500 fine they pay is nothing compared to the thousands they’ll make during summer break. Expect enforcement of the unjust laws to increase. The parents don’t care, they pay the credit card bills — giving the village more time before bankruptcy sets in.

My old village is no different than yours or the one near you — they’re all overbudget. The dollar isn’t as powerful as it used to be, but the village unions keep asking for more money and requiring no major labor cuts without seeing strikes and huge problems. The people think they’re safer and better off when another officer is seen driving their streets (looking for rolling stops and slight speeders) and when the plastic park is being built (when the teachers are alleged sex criminals). I’m no fan of village spending, but you won’t find even a guy like me complaining. You don’t complain either because no one will listen.

If you are against paying for my old village, send this link to your friends and family. People need to know that they’re covering the cost of not only Gurnee, Illinois’ budget overspending, but hundreds and thousands of other villages that you don’t live in, don’t shop in, and could care less about.

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