Chicago’s budget includes higher tax rates for parking, vehicle leasing and cable TV
Mayor Rahm Emanuel delivered his 2015 Chicago budget proposal to the City Council last week. He did so expressing pride that he did not increase property taxes, sales taxes or the gas tax – the big three taxes that support the city budget. That said, his budget proposal continues to nickel-and-dime Chicago taxpayers with new...
Mayor Rahm Emanuel delivered his 2015 Chicago budget proposal to the City Council last week. He did so expressing pride that he did not increase property taxes, sales taxes or the gas tax – the big three taxes that support the city budget.
That said, his budget proposal continues to nickel-and-dime Chicago taxpayers with new increases in tax rates that are already some of the highest in the nation. It also provides new funding for a handful of new or expanded programs, plus more than 100 new city workers in administration, community services and public safety. But Emanuel’s budget doesn’t come close to addressing the impending financial crisis that will come in 2016, when the city will need an additional $550 million for increased pension contributions. Nickel-and-diming will not do any longer.
Here is the litany of higher taxes and fees that beef up the 2015 Chicago budget:
Personal Property Lease Tax: The rate is increased to 9 percent from 8 percent on the long-term lease of vehicles and office equipment, raising $15 million.
Parking Tax: The rate is increased on parking in the city to 22 percent from 20 percent on weekdays, 20 percent from 18 percent on weekends, and the base is expanded to cover valet charges, raising $12 million.
Amusement Tax: The rate on cable TV, which was raised just last year to 6 percent from 4 percent, rises again to an effective rate of 9 percent, increasing revenues by $12 million. Also, the exemption from the 9 percent tax for skyboxes at Chicago stadiums and arenas is removed, raising $4 million.
All these increases follow on the heels of other significant tax and fee increases imposed on Chicagoans over the last year or two, including the recent increase in the nation-leading cell-phone 911 surcharge to $3.90 per month per line from the old fee of $2.50, which is expected to add $40 million to the 2015 budget (though technically it should be used only for 911-related costs); and the $0.50 per-pack increase in the cigarette tax (now $1.18 a pack), which made Chicago the most expensive place to buy cigarettes in the country.
With recent increases in car-rental taxes (23 percent combined rate), hotel taxes (16.4 percent combined rate), parking taxes (22 percent rate), water and sewer fees and others, Chicagoans and Chicago’s visitors are now forced to pay some of the highest tax rates in the nation. And all this is in addition to some of the highest sales, property and gas taxes in the nation.
And yet, with all these sky-high tax rates, City Hall has not addressed the major issues within the budget. The budget relies on uncertain tax collections, heightened tax enforcement, one-time sales of city property and cost reductions that are far from certain, like reduced spending from phasing out retiree health-care funding.
At some point, the mayor and the City Council must get serious about eliminating rather than adding and expanding programs. New and expanded programs such as rat eradication and tree planting, limited as they may be, don’t have a place in such a tight budget unless officials make room by cutting back in other places. City officials must pursue cost-cutting with the same fervor they have previously applied to growing the functions and finance of city government.
The Chicago Tribune recently reported on a paper by the Civic Federation warning of the many “booby-traps sure to explode in taxpayers’ faces later” that state officials have set in the 2015 state budget. But our state leaders are not the only ones capable of budgeting with gimmicks and short-term fixes. The land mines within Chicago’s 2015 budget will be just as injurious to taxpayers as those in the state budget. The explosions are not far off.