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Mayor's 'concern' could sink Stroger's hotel-restaurant hike

Friday, January 07, 2005
Chicago Sun-Times

If Cook County Board President John Stroger's plan to balance his 2005 budget on the backs of restaurants and hotels was on life support before, it's probably dead as a doornail now.

That's because Mayor Daley is raising "concerns" about the 2 percentage-point increases in hotel and restaurant taxes. That's Daley-speak for find another way to close your $73 million budget gap.

Stroger bit back at Daley, saying: "I can see him worrying about the city, but my job is to represent the 51/2 million people across Cook County, not just the city."

Daley doesn't want to look like he's pulling Stroger's strings -- especially not when the mayor's own brother serves as chairman of the county board's Finance Committee.

But the mayor said he's genuinely "concerned" that the Stroger taxes could cripple Chicago's already struggling convention and tourism industry and jeopardize the city's take from the hotel and sales tax increases that Daley used to solve his own budget problems.

Daley's $85.7 million revenue package included a 0.25 percentage-point increase in Chicago's sales tax -- to a big-city high 9percent -- and a 0.5 percentage-point hike in the tax on hotel rooms -- to 15.4 percent.

That's what made Stroger's decision to hammer those very same industries all the more controversial.

"It concerns everyone. . . . That's why, even in our budget, we met with the respective industries and we compromised on many things," Daley said.

Mayor's brother fears alternatives

The mayor's original plan called for raising the city's hotel tax by 1percentage point. He cut it in half and delayed the effective date until July 1 under pressure from industry lobbyists. The sales tax was also put off six months.

Asked if he would prefer Stroger go in a different direction, Daley said, "They'll have to look at it very cautiously. . . . It not only affects the city. It affects the suburban area as well. That would be up to them. I have enough issues in the city. Let the county deal with their issues."

Stroger said he spent months working on the $3.04 billion budget before deciding to raise hotel-motel taxes by 2 percent and restaurant taxes another 2 percent.

But Christopher Bower, CEO of Chicago Convention and Tourism Bureau, said there is only so much taxation Chicago's convention and tourism industries can absorb.

"We have to be very careful that we don't layer and layer and layer [tax increases] and cause business to have reason to go someplace else," Bower said.

John Daley said he "shares" his brother's concerns, but agreed to support Stroger's hotel and restaurant taxes after becoming convinced the alternatives were worse.

"I don't know where else we could get the additional revenue to make this up. People have suggested the parking tax. The sales tax was eliminated. We couldn't pass it last year. One possibility may be another increase in the cigarette tax, but the city did that, too. No matter what is proposed on the city side, passing the county [budget] later has this effect. That's the problem," John Daley said.

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