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Daley, like Stroger, has midyear tax hikes that hide true cost

Sunday, January 09, 2005
Chicago Sun-Times

County Board President John Stroger took considerable heat last week for proposing a 2005 budget with $124 million in new taxes and billing it as a $73 million increase.

The same can be said for Mayor Daley.

Daley's $85.7 million revenue package, approved last month by a reluctant City Council, actually adds $108.7 million to the annual tax burden of those who live, work and play in Chicago.

That's because the 0.25 percentage point increase in Chicago's sales tax -- to a big-city high of 9 percent -- doesn't take effect until July 1. Although the tax would raise just $20 million this year, it's conservatively expected to rake in $40 million in 2006.

There's also the 0.5 percentage point increase in the city's hotel tax, which would bring the tax on Chicago hotel rooms to a whopping 15.4 percent -- even before Stroger's proposal to pile on 2 percent more.

Like the sales tax, Daley's hotel tax increase also takes effect in midyear. It's expected to raise $3 million this year and $6 million in 2006.

There are other similarities between the Daley and Stroger tax plans.

The County Board president wants state approval to levy a new tax on cell phones, pagers and telecommunications devices. Daley wants the General Assembly to double the monthly tax on telephone bills -- from $1.25 to $2.50.

The mayor also wants legislative approval to raise the real estate transfer tax by $2.50 and shift the burden from buyer to seller.

Those two state-approved taxes alone would raise $90 million in annual revenue. If the General Assembly goes along, Daley's $85.7 million tax, fine and fee package would climb to nearly $200 million in 2006.




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