Phone Tax Hits Rockford's Small Businesses

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Tough economic times are about to get tougher for Rockford residents and business owners, following Monday night's passage of the Rockford city budget. A budget that includes three tax hikes.

In the coming weeks, Rockford residents and business owners will be paying more to make phone calls, get rid of their garbage and use water. Increases that are hard for many business owners to swallow.

Becky Peterson is the president of Mobility Connection, a Rockford company that sells and manufactures accessibility equipment. The company's phone bill is more than $600 a month.

"All day long. That's our lifeline for our customers and our manufacturers so it's very important that our phones are in place," said Peterson.

While the new taxes won't shut mobility connection's doors, they will have an effect, coupled with cuts in federal programs like Medicare.

"Any increase to any citizens or small business is a concern so we've got to make some budget adjustments," Peterson said.

Aldermen who voted against the budget plan say there were other places to cut and their constituents didn't support tax increases.

"I've talked to people who are in business who are just barely hanging on. So that's why I didn't vote for the taxes," said Alderman Timm, Ward 9.

Peterson of Mobility Connection says it would have been easier on small business owners if the tax hikes took effect incrementally so businesses could better adjust and the city could see the effects of each new tax.

When do the taxes go into effect?

Ten days from now the water and garbage increases will take effect, then residents and business owners will see the five percent phone tax hike July 1.