County urged to boost sales taxCity total would be 11% under plan
Tuesday, September 25, 2007
by Mickey Ciokajlo
Cook County's sales tax would more than triple, pushing Chicago's rate to 11 percent, under a proposal Board President Todd Stroger wants commissioners to consider next week.
Stroger scheduled a special meeting of the County Board Monday, immediately after a Finance Committee public hearing on a proposal to raise the tax from 0.75 percent to 2.75 percent. Prospects for passage are far from certain among the highly divided board.
Stroger's office would not say Monday whether he supports the increase, but at least one commissioner said he got a call from the president late last week asking him to support the proposal. Administration officials have been talking to commissioners in recent weeks about whether they could support some form of higher taxes to fill a 2008 budget deficit estimated by some officials to be as large as $400 million.
"The president supports ways to increase revenue wherever possible," spokeswoman Ibis Antongiorgi said. "This would be a possible revenue source."
The Stroger administration could not say how much revenue the increase would generate. At the current rate, the county sales tax brings in about $300 million a year. Critics said such a large increase in the rate would send shoppers outside Cook County and would particularly hurt businesses that sell big-ticket items such as cars and appliances.
"I don't think the proponents of this measure recognize what a dramatic impact this big of a sales tax increase would have on the economy," said Commissioner Mike Quigley (D-Chicago), who opposes the proposal.
Commissioner Roberto Maldonado (D-Chicago), a possible swing vote on the 17-member board, said Monday he is leaning strongly against a sales tax increase.
Maldonado said he told Stroger administration officials he was willing to consider some type of tax increase, but that was before Commissioner Joan Murphy (D-Crestwood) introduced the sales tax proposal last week.
Maldonado said he would be more in favor of utility taxes that have been introduced by Commissioner William Beavers (D-Chicago), if senior citizens were exempted.
Beavers' proposed new taxes on electricity and natural gas are in committee with no hearing date set. Beavers has also introduced a telecommunications tax.
Stroger has not said how large the county's projected shortfall is for 2008, but some county officials have pegged the shortfall at $300 million to $400 million.
Faced with a $500 million budget hole in 2007, Stroger laid off county workers and closed health clinics but did not seek a tax increase.
Stroger has repeatedly warned some tax increase is likely, only ruling out a property tax boost. He has said he wants to find out what taxes board members can support before he releases his budget proposal in October.
"There's a lot of revenue packages out there, and commissioners have to decide which ones they think are the best," Stroger said last week.
Commissioner John Daley (D-Chicago), a Stroger ally and chairman of the Finance Committee, said he is open to a sales tax increase or other proposals to raise revenues. He said it is possible the size of the sales tax increase could be reduced at Monday's meeting.
"A sales tax is a hard pill, but how do we fund three hospitals?" Daley said. "It's an option I'm looking at."
Some commissioners and outside observers questioned Monday how Stroger could seek approval of such a large tax increase before he has presented his 2008 budget or even announced the projected deficit. Antongiorgi would only say Stroger would release the projected deficit "in the near future" but declined to say if that would be prior to Monday's meeting on the sales tax.
"It makes a mockery of the legal requirement for a public hearing when the president has not even said what his budget looks like or what his revenue needs are," Commissioner Forrest Claypool (D-Chicago) said. "I think the Stroger administration believes they have the votes or otherwise they wouldn't call a rapid-fire board meeting immediately following a public hearing."
Chicago shoppers now pay 9 percent in sales tax, with 5 percent going to the state, 2.25 percent going to the city, 1 percent going to the Regional Transportation Authority and 0.75 percent to Cook County. Additionally, downtown diners pay a 1 percent food-and-beverage tax levied by the agency that runs McCormick Place and Navy Pier. If the county raised its sales tax by 2 percentage points, those diners would see a total 12 percent tax on their tabs.
The County Board has not raised its portion of the sales tax since it was first approved in 1992. Former President John Stroger proposed hiking it to 1 percent for the 2004 budget but failed to muster enough votes for passage. The elder Stroger, father of the current board president, turned twice in recent years to large increases in the cigarette tax when proposals for taxes on leases, hotel stays and restaurant meals failed.
County commissioners are not the only elected officials eyeing a boost to Chicago-area taxes.
A year after the board turned away Stroger's sales tax proposal, Mayor Richard Daley won City Council approval of an increase in the city's portion of the sales tax, bringing it to the current combined level of 9 percent. Faced with a $217 million shortfall for 2008, Daley has been signaling the need for new revenue in next year's budget and City Hall veterans predict some form of tax or fee increase is likely.
Daley said Monday he wasn't aware of next week's hearing on a county sales tax increase.
In Springfield, state lawmakers are still considering a plan to boost mass transit funding that includes a 0.25 percent sales tax increase in Cook County and a 0.5 percent increase in the collar counties.
Murphy said she's pressing to move on the proposal quickly before the city or the state raise their portions of the tax.
"This time I'm trying to get us in there first before the city and the state does something," Murphy said.