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Preckwinkle budget would raise cigarette, gun taxes
Cook County Board chief faces eliminating last quarter of sales tax increase

Friday, October 19, 2012
Chicago Tribune
by Hal Dardick and Alejandra Cancino

Cook County Board President Toni Preckwinkle is on the cusp of wiping out the last bit of a highly unpopular sales tax increase approved under her predecessor, but to get there she wants to raise taxes on cigarettes, some large business purchases, video gambling machines, and guns and bullets.

The first-term Democrat delivered that message Thursday as she presented a 2013 county budget that calls for spending $100 million less than when she took office two years ago.

The central trade-off in the financial blueprint hinges on the elimination of the last quarter of a 1 percentage-point sales tax increase enacted under former Board President Todd Stroger. Come Jan. 1, the overall sales tax in downtown Chicago would drop to 9.25 percent. The county's portion of that is 0.75 of a percentage point.

But that tax cut would result in $86 million less coming into county coffers. To help make up for the loss, Preckwinkle's host of new and higher taxes would bring in $43.4 million.

The idea, Preckwinkle said, is to reduce "taxes for everyone by twice as much as we have selectively raised them."

"In doing so, we have incrementally raised the price on items like cigarettes, guns and gambling machines in order to continue to lower the price on milk, toothpaste and other everyday necessities," she said.

The $1-a-pack cigarette tax increase would bring in about $25.6 million next year, county officials say, even after accounting for the smokers who would cross county and even state lines to escape per-pack taxes of $6.67. That's second in the country only to New York City's $6.86.

By contrast, the guns and ammunition tax — $25 for each gun purchased and 5 cents per bullet — would raise just $1 million. And the $800 license the county would require for each slot and video poker machine would bring in about $1.3 million.

Preckwinkle justified those taxes by saying they will defray the costs of the county's massive public health care and criminal justice systems, which account for nearly three-fourths of the county's proposed $2.95 billion budget.

"As the leading provider of public health care in our region, I believe that, if you choose to smoke, you should have a hand in paying for the health consequences of your decisions," Preckwinkle said.

She went on, contending the $800 tax on every gambling machine was equal to a single day's revenue from a slot machine at Rivers Casino in Des Plaines.

"They keep their other 364 days of revenue," she said. "We use that one day's revenue to help mitigate the impact of the associated costs of crime, health, addiction."

Likewise, the politician from the liberal Hyde Park-Kenwood area stood behind her guns and ammunition tax, which even some allies said might be a tough sell because of push-back from the gun lobby and others who questioned the link between legal gun purchases and crime.

Citing a University of Chicago study, she said 29 percent of guns used in Chicago crimes that are later seized by police can be traced to suburban gun shop purchases. She also said 70 percent of gunshot victims treated at Stroger Hospital have no health insurance.

"Every revenue measure that I call for is targeted, it's responsible and it's focused on supporting the services we provide," she said.

Later, when she was pressed on whether the guns and ammunition tax would really affect criminals, she said, "I make no apologies."

While the cigarette, gun and gambling taxes each have their opponents, vocal opposition was generated by Preckwinkle's proposed 1.25 percent tax on the out-of-county purchase of items worth more than $2,500 for use within the county. The administration estimates it would raise about $15 million a year.

Some business owners wondered why the so-called use tax is coming now as the economy is improving.

"The thing that I find frustrating is that we are back in a growth mode, and this is one more regulatory burden that we have to track when we are trying to create jobs," said Jason Speer, president of Schaumburg-based Quality Float Works, a maker of devices used to measure liquid levels.


Mark Denzler, vice president and chief operating officer of the Illinois Manufacturers' Association, said Preckwinkle is increasing costs for manufacturers that operate in Cook.

"I think it is unfortunate that President Preckwinkle and Democrats think taxes is the solution to every problem," Denzler said.

Chicago already charges a 1 percent use tax on items worth more than $2,500, but Preckwinkle defended the plan.

"Our policy here is straightforward," she said. "If you're a business and you choose not to support local businesses in your area, that is support our local economy, you will have to pay a little more."

A county use tax already is levied on titled property, such as cars, boats and RVs. The rate for the titled use tax was raised last year by a quarter percentage point, to 1 percent.

Preckwinkle and county commissioners also raised taxes on alcohol and loose tobacco and cigars. Those taxes, along with the doubling of vehicle stickers for cars in unincorporated areas, are expected to pour about $46.7 million into county coffers this year.

If Preckwinkle gets her latest budget proposal through, she will have overseen the passage of new and increased taxes and fees totaling $90.1 million a year. That's less than half of the $220 million that was raised in a full year by the half-penny on the dollar sales taxes she will have eliminated. The board had voted to roll back the other half of the sales tax hike before Preckwinkle took over.

To close a budget shortfall originally pegged at $268 million, Preckwinkle also is relying on approval of a federal waiver that will allow the early enrollment of 115,000 more patients in Medicaid that otherwise couldn't pay for their county health care.

She's counting on that to net $99 million for the health care system next year, saying approval from the Obama administration is expected in the next couple of weeks. Preckwinkle acknowledged that there are no contingency plans.

"If for some reason that fails, this whole thing goes south," said Commissioner Larry Suffredin, D-Evanston. He also said he's not sure Preckwinkle can muster sufficient votes to pass the guns and ammunition tax because even some Democrats oppose it.

"It only raises a million bucks," said Suffredin, a strong gun-control proponent who backs the measure. "But I think it's important to be out there discussing how (lives) are destroyed by these guns and bullets."

Gun rights groups already have spoken out against the proposal and raised the question of whether the tax would be constitutional.

Just as Preckwinkle enjoys the backing of heart, lung and respiratory associations in raising the cigarette tax, she is backed by gun-control groups on the guns and ammunition measure.

"Is this going to solve the problem? No. But it's a step in the right direction," said Colleen Daley, executive director of the Illinois Coalition Against Handgun Violence.

Preckwinkle also plans to make $50.7 million in cuts. Those include eliminating 462 jobs, all but 10 of which are now vacant, to save $27 million.

She's also continuing efforts to reduce the population at the Juvenile Temporary Detention Center, where it costs $600 a day to house and educate young people accused of crimes, by finding alternatives to get them treatment and guidance. And she's also making more efforts to reduce the jail population, where it costs $143 a day to detain inmates, by taking steps to get more people accused of nonviolent crimes released on bond while they await trial.

Preckwinkle is even taking the initial steps to lease a second set of county offices on the 34th and 35th floors of a downtown high-rise, a deal that could generate as much as $1 million annually in the coming years.

"I've got an office over on the 35th floor, some of my younger staff members say it's bigger than their first apartments," she said. "I don't need this space, and rather than just having it sit there, we're going to invest in upgrading it so it can be used by other tenants, rented out as a potential revenue opportunity for the county."



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