Residents Oppose the Projects That Fund Their Services: Mayor Reveals What Really Keeps Suburbs Solvent

Written by:

Rudi Davis

Date:

10 Dec 2025

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Burr Ridge mayor says sales tax and development fees, not property taxes, determine whether suburbs can fund police, roads, and services – creating a fundamental disconnect with residents who oppose revenue-generating projects

Most suburban residents assume that property taxes are the lifeblood of their local government. But according to Gary Grasso, Mayor of Burr Ridge, Illinois, this belief is a major reason why many communities struggle to fund essential services and manage resident expectations.

“Most people think municipalities live and die on property taxes. We do not. We live and die on sales tax and development fees,” Grasso says. He argues this fiscal reality creates a structural tension that few residents recognize and most elected officials avoid addressing directly.

This disconnect was clear when Burr Ridge considered a Costco development on a vacant 110-acre industrial site. From a municipal finance perspective, the project made sense – Costco would generate substantial sales tax revenue, the site is near major highways, and the logistics were sound. But residents saw only potential traffic, congestion, and a threat to community character. Despite the fiscal benefits, the proposal was abandoned after public pushback.

The Revenue-Service Paradox

Grasso says this situation highlights a central dilemma for affluent suburbs. Residents expect high-quality police protection, well-maintained roads, strong schools, and low property taxes. Yet they often oppose the very developments that provide the revenue needed for those services.

“Costco was, from a revenue standpoint, something the village had to seriously consider, but we had to respect residents who felt it was too intense a use,” Grasso says. The village ultimately sided with residents, but Grasso is explicit about the financial consequences.

The underlying math is unforgiving: the developments most likely to generate meaningful sales tax revenue are also the ones most likely to bring traffic and operational intensity that residents dislike. Big-box retailers like Costco attract significant sales tax but also increase vehicular traffic. Industrial distribution centers provide revenue but require truck traffic and round-the-clock operations that disrupt neighborhood character.

This creates what Grasso describes as a governance challenge that demands honest discussion rather than political avoidance. Communities that repeatedly reject revenue-generating projects have only a few options: accept higher property taxes, cut services, or identify new sources of revenue. There is no alternative.

The Costco case shows how this dynamic plays out. Burr Ridge has remained debt-free for over four years and has not raised property taxes for six consecutive years – a record Grasso says is nearly unmatched among Illinois towns north of I-80. But sustaining that fiscal health requires revenue from other sources.

Why Sales Tax Matters More Than Residents Realize

The reliance on sales tax, rather than property tax, shapes every development decision. Property tax revenue is stable and predictable, coming from existing homes and businesses regardless of economic activity. Sales tax, by contrast, rises and falls with consumer spending, which means municipalities depend on businesses that draw shoppers.

This is why suburbs compete for retail developments and why losing a major retailer can create sudden budget shortfalls. When a big-box store closes or moves to a neighboring town, the sales tax revenue disappears immediately. The municipality then faces hard choices: cut services, raise property taxes, or lure new retail – often by offering incentives that strain budgets further.

Grasso sees this as a structural issue that extends beyond Burr Ridge. “We had to respect the residents who felt it was too intense a use and would generate too much traffic and change the character of Burr Ridge, so we respect that, but that property is going to develop,” he says. “It’s 110 acres on the DuPage side of Burr Ridge, right off major highways. As mayor, it’s my duty to make sure it gets developed in a way that complements Burr Ridge and provides us with an economic engine for essential services.”

This statement highlights the constraint facing suburban mayors: development is inevitable because municipalities require revenue. The only real choice is what kind of development the community will accept and how much fiscal sacrifice it is willing to make to preserve its preferred character.

The Search for Lower-Impact Revenue

This financial reality drives Burr Ridge’s current approach to the vacant CNH Industrial property. Rather than seeking high-traffic retail or industrial uses, Grasso says the village is considering entertainment venues, specialized retail, and mixed-use projects that could generate sales tax without the 24/7 truck traffic of industrial facilities.

“We cannot have a development that has a lot of rough bays that would ask for 24/7 truck traffic. That just is not going to be something that I believe this board, the plan commission or I will support,” Grasso says. The challenge is to find uses that provide enough revenue without causing the operational disruptions residents fear most.

Entertainment venues and specialized retailers can generate sales tax, but usually less than a Costco or distribution center. This is the trade-off: lower-impact development brings in less money, which means the village must either accept a smaller budget or look elsewhere for additional funds.

Grasso believes municipalities need to be more transparent about these fiscal realities. When residents oppose a development, they should understand what services may be cut or what property tax increases might be required to make up for lost revenue. The real debate should not be whether to allow development, but what kind of development the community wants and what cost it is willing to bear for its choices.

Implications for Other Communities

For other suburbs facing similar conflicts, Burr Ridge’s experience underscores that the traditional suburban finance model may be reaching its limits. As residents become more organized in opposing development and as e-commerce challenges brick-and-mortar retail, municipalities that depend on sales tax may find it increasingly hard to balance budgets.

Whether other communities follow Burr Ridge’s path of seeking lower-impact revenue sources, or whether fiscal pressures eventually force acceptance of more intensive development, will depend on how long residents are willing to accept reduced services or higher property taxes to maintain their community’s character.