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Stroger may turn to cafe, hotel taxes
Source reports budget propos

Wednesday, January 05, 2005
Chicago Tribune
by Mickey Ciokajlo

Cook County Board President John Stroger will seek new 2 percent taxes on hotel rooms and restaurant meals as part of a menu of tax hikes to balance his 2005 budget, Cook County Commissioner Mike Quigley said Tuesday.

A spokeswoman for Stroger, who is set to unveil his budget proposal Wednesday afternoon, declined to comment on Quigley's report, which the commissioner attributed to a county source familiar with the new budget.

Stroger's financial aides have told commissioners to expect tax hikes to fill a $73 million budget hole, but so far they have declined to be more specific other than to show a list of potential taxes.

A new county tax on food and beverage purchases at restaurants would bring the total tax tab to as much as 12.25 percent in downtown Chicago.

And a new hotel tax, coupled with ones already charged in Chicago by the city, state and other agencies, would bring that levy to 17.4 percent, which, business groups complain, would hamper efforts to revive the sagging convention industry.

In addition to the restaurant and hotel taxes, Quigley said, Stroger will propose a new amusement tax for coin-operated devices such as video games and video poker machines. Chicago currently levies such a tax in the form of a sticker on the side of each machine, but Cook County does not.

"In the end, this budget proposes taxes when it doesn't need to," said Quigley, a Chicago Democrat who with other commissioners has proposed cuts in spending as an alternative to raising taxes. "Just because it's not a real-estate tax doesn't mean it doesn't affect you."

Quigley doesn't believe Stroger can muster a majority of the 17-member board to pass the new taxes. Last year, commissioners rejected two Stroger tax proposals before approving by one vote a large hike in the cigarette tax.

Commissioner Gregg Goslin (R-Northfield), who said he also heard Stroger was considering the three taxes, also doesn't think the president can win approval for them.

Goslin said he and other commissioners will introduce proposals to cut spending and make the government run more efficiently.

"The president's job is to put out a balanced budget," he said. "Now we begin the dance of legislation. We'll see what that process brings."

The hotel and restaurant industries hope it brings the end of the tax proposals.

Hotels in Chicago still have not recovered from a drop-off in business following the Sept. 11, 2001, terrorist attacks, and taxes here are already higher than in many cities competing for convention business.

"The problem is everybody just kind of looks myopically and says, We'll just increase our portion," said Marc Gordon, president of the Illinois Hotel & Lodging Association. "There's no referee to say, Hey, let's look at the total here. And that's what we have to compete on."

Colleen McShane, president of the Illinois Restaurant Association, said the industry is already facing major hurdles with an increase in the state's minimum wage, higher health-insurance costs, Chicago's recent sales-tax hike and other levy increases.

"Two percent? We'll be one of the highest taxed cities in the nation," McShane said. "I won't believe it until I see it. It's huge."

Gerald Roper, president of the Chicagoland Chamber of Commerce, said his group will hold commissioners' "feet to the fire" and make certain the politicians' constituents are informed of the proposed taxes.

"The question we are going to ask them is, Why are you going to continue to raise taxes? Why aren't you reducing expenses?" Roper said. "We're going to continue to pound away at that."

Laurence Msall, president of the Civic Federation, which tracks local budgets, said his group was waiting to see Stroger's official budget proposal before commenting. However, Msall said the $3 billion budget should contain "sufficient room" to wring out more efficiency and avoid tax increases.

Stroger has said the budget-making process started with a $252 million deficit in the fall when his finance team received spending proposals from department heads and elected officials.

Through cuts and increased revenues, the hole was closed to $73 million. Stroger plans to cut 620 vacant positions from next year's budget.



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