Chicago-area sales taxes were already No. 2 in the U.S., but new taxing authority handed to the Regional Transportation Authority will raise them to No. 1.
Lawmakers may approve a statewide delivery tax on Doordash and Uber Eats to fund Chicago transit, hitting all Illinoisans who shop online, even those who don’t use CTA, Metra or Pace.
Ridership on Metra, the Chicago Transit Authority and Pace is still down 30% from pre-pandemic levels. The agency overseeing all three needs to look at spending before demanding $1.5 billion from taxpayers.
Adding sales taxes to services is limited in the U.S., with 46 states not generally taxing services. Illinois may break from the pack and start adding sales taxes to haircuts, lawn care, car repair and a long list of other service expected to cost $2.7 billion.
Illinois lawmakers are looking to expand sales taxes to include things such as streaming services, gym memberships, vehicle repairs, hair care and other services to bail out Chicago’s failing transit systems and put more money in government budgets.
Chicago’s 2025 budget is facing a nearly $1 billion gap. Mayor Brandon Johnson’s plan to close it: increase taxes. The city’s rising non-personnel costs, now at $6.6 billion, will outpace its grant funding, squeeze taxpayers and increase regressive fees.
Illinois Gov. J.B. Pritzker approved doubling the state gas tax in 2019 and gave some counties and Chicago the power to hike local gas taxes. Lake County is the latest to consider doing so.
Very few people have been commuting to work since Illinois’ stay-at-home order began at the end of March, which could mean tax and fare troubles are ahead for Chicago’s mass transit.
Chicago’s $1.15 billion projected budget gap is the latest in a decades-long string of structural deficits. Making Chicago’s high taxes worse is not the solution.