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Daley wary on Stroger tax plan

Friday, January 07, 2005
Chicago Tribune
by Gary Washburn

The possibility of sharp increases in the tax on hotel stays and restaurant meals "concerns everyone," and the Cook County Board "will have to look at it very cautiously," Mayor Richard Daley said Thursday.

County Board President John Stroger's proposal of a new county hotel levy of 2 percent and a similar tax on restaurant patrons has sent tremors through the hospitality industry.

Daley stopped short of calling on the County Board to reject the increases, saying "it's up to them to make their independent judgment," but he added that when he has sought revenue increases, his administration has met with affected groups and compromised.

Nevertheless, Daley's budget-balancing efforts promise to take their own toll on the industry. The City Council recently approved mayoral proposals for a 0.25-percentage point increase in the sales tax collected in Chicago, a 0.5-percentage point increase in the city's hotel tax and higher levies on wine and liquor.

"We have to keep the city competitive," said Christopher Bowers, CEO of the Chicago Convention & Tourism Bureau. "We have to be careful we don't layer and layer and layer [tax increases] and cause business to have reason to go somewhere else."

As it is, taxes here put Chicago "among the highest of the principal cities with which we compete," Bowers said. From a competitive standpoint, people have lots and lots of opportunities to go to other places. We want to generate jobs. We have to generate revenues. We have got to be competitive in order to do that."

The rising taxes come as Daley and Gov. Rod Blagojevich are seeking union work-rule concessions at McCormick Place to bring down costs and make Chicago more attractive to managers of conventions and trade shows.

Daley said he understands local government's need for higher revenues to offset increasing expenses, and he took the opportunity to plug his proposal for a Chicago casino, something Blagojevich opposes.

The moral issue surrounding gambling "already has been decided in Illinois," the mayor asserted. "The Joliet area decided it. Elgin has decided it. Peoria, southern Illinois have decided it."

Chicago should be given the authority to generate a new source of revenue just as those places have, he said.

The County Board must be convinced that hotel and restaurant tax increases are "not a good idea," Bowers said. "When you are talking about 2 [percentage] points, that is a big jump." Chicago has three of the five top-rated hotels in the country and excellent restaurants and cultural attractions, he said.

"We have so much going for us [but] we have to be cognizant that people do have choices."

Daley and Bowers spoke at a ceremony marking the opening of the new $50 million Goose Island campus of Kendall College, a culinary school that recently moved from Evanston and which, coincidentally, supplies graduates to the city's hospitality industry.

Kendall in September began operations in a renovated eight-story building that Howard Tullman, the college's president, said is the "largest and most sophisticated facility in the United States."

It has 16 high-tech kitchens, a wine room, restaurant, organic gardens and an auditorium with a demonstration kitchen and broadcast capability.

The school plans to triple student enrollment, now 700, over the next three years.



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