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Cook County tax on cable TV seems dead

Tuesday, November 03, 2015
Chicago Tribune
by Phil Kadner

ook County Board President Toni Preckwinkle is "rethinking" her plan to impose a 3 percent amusement tax on cable TV, bowling and golf in response to massive public opposition led by suburban mayors, senior citizens and a growing rebellion among county commissioners.

"In all likelihood there's not going to be a vote because the votes simply aren't there to support it," Commissioner John Daley, D-Chicago, said.

Commissioners Deborah Sims, D-Chicago, Joan Murphy, D-Crestwood, and Sean Morrison, R-Palos Park, whose districts along with Daley's represent the Southland on the County Board, said Tuesday that they would vote "no" on the proposed amusement tax.

Commissioner John Fritchey, D-Chicago, offered an amendment to Preckwinkle's proposal, calling for a budget cut of more than 1 percent in place of a higher amusement tax. Fritchey noted that Cook County has passed a 1 percent sales tax increase (estimated to raise $473 million next year), Chicago recently passed the largest property tax increase in its history and the state is likely to pass an income tax hike once the budget stalemate in Springfield is resolved.

The Southwest Conference of Mayors, led by its president, Palos Hills Mayor Gerald Bennett, had passed a resolution urging county commissioners to oppose Preckwinkle's plan because the "expansion of the amusement tax will impact greatly seniors, young families and low-income families." The resolution also says the wider tax would "devastate the already hurting recreational activities such as golf and bowling" and "negatively impact job growth and economic development in Cook County."

Preckwinkle, following a public hearing on her proposed tax increases, issued a statement acknowledging the growing opposition to her budget plan.

"We have heard the concerns raised with the amusement tax, and we are exploring all revenue approaches with commissioners," Preckwinkle's statement says. "Responsible and responsive government is informed by listening carefully to all voices. But to be very clear — we simply cannot rely only on traditional revenue sources, some of which have declined in recent years.

"And with 87 percent of the County's General Fund, our core operating budget, driven by personnel expenses, there are limits to where we can turn to balance the budget. Without additional revenue, agencies and departments across the County will be faced with further workforce reductions."

Daley, the county board's finance committee chairman, said it became obvious during Tuesday's hearing on the budget that Preckwinkle didn't have the votes to support expanding the amusement tax.

But he quickly added that the board voted to approve new union contracts with employees that made it "obvious to anyone" that new revenue would be needed to balance the county's budget. Daley said the commissioners who voted for those contracts are having second thoughts about imposing the tax hikes needed to support them.

Murphy said she received an overwhelming number of phone calls from senior citizens, as well as from Southland mayors, opposing the broader amusement tax.

"For a lot of those senior citizens, television is their main form of entertainment," Murphy said. "The amusement tax would have made it difficult for them, especially people living on fixed incomes, and I understand that and appreciate their concerns. So I decided I would vote 'no' on the amusement tax if it comes up for a vote and informed the county board president of that."

Morrison, who was appointed to the County Board in July to fill the seat vacated by Elizabeth Gorman, said that he had not seen Fritchey's proposal but generally favored any plan that would cut up to 2 percent from the county budget. He said he will vote "no" on Preckwinkle's plan.

"The public is opposed to it, suburban mayors told me they oppose it, and only one or two people told me they though it was a good idea because the county needed the revenue to balance its budget," Morrison said. "I think there's a better way to balance the budget and that's to cut spending."

Bennett questioned whether the county could legally impose a tax on cable TV companies.

"The state law is very clear, and only municipalities have the authority to negotiate the terms of contracts with cable companies," Bennett said. "We negotiated a 30-year franchise agreement (in Palos Hills) ... and we get a 5 percent franchise fee. If the county were to pass this amusement tax, there's no doubt in my mind that many people would explore going to satellite dishes or Netflix as options because there's no tax on them. That would mean less money for municipalities."

Bennett noted that Palos Hills also operates a municipal golf course and said its profit margins are slim and any tax could drive golfers to other courses.

In her statement basically acknowledging defeat, Preckwinkle said that "government at every level has two obligations: to provide good services and to do so as effectively and efficiently as possible. (My) budget proposal strikes a balance between what is necessary for the operation of our government and what is responsive to the concerns of our residents.

"We have said repeatedly that we would face significant challenges in this budget process. In turn, we crafted a proposal that balances more than $100 million in targeted expense cuts, including some workforce reductions, with modest revenue enhancements."

Murphy noted that the 1 percent sales tax increase, which years ago caused a public uprising that ousted former County Board President Todd Stroger from office, not only passed this year but "without any major repercussions. It went pretty smoothly given all the uproar in the past."

Preckwinkle was first elected to the board presidency in 2010, promising a repeal of that tax hike.

I believe the sales tax increase was needed. But the constant piling on of tax and fee increases by local governments in Illinois is burdening taxpayers so much that it seems to be reaching its breaking point.

A tax on cable TV seemed almost destined to create a public backlash because it hits people in their living rooms. But it's not the first time that Preckwinkle has embraced a revenue increase that seemed fated to fail.

She tried to impose a special tax on unincorporated areas several years ago for county services, such as police protection, that taxpayers were already paying for and also sought parking fees at suburban courthouses that are used primarily by the poor.

Suburban mayors are already besieged by a Republican governor who's withholding motor fuel tax money, video gambling revenue and 911 funds from their towns. And while Chicago residents have received a great deal of sympathy in the media over the city's huge property tax hike, Chicago's tax rates are still far below those in the suburbs.

And the Cook County sales tax rates drive consumers to shop in bordering states and counties, such as Will County, where customers may only have to travel a few minutes to find significant savings. That means too many small businesses on the outskirts of Cook County are forced to close their doors, and new ones often never replace them.

A 3 percent tax on cable TV and certain leisure activities would not have made an impact on any of that, but it would have been another reason for residents to escape Cook County — as if anyone needs such an excuse.

Democrats, who claim to be the party of the poor and middle class, need to understand that imposing taxes that hit those groups the hardest may not be the smartest political strategy.

At least the public reaction to the expanded amusement tax seems to have gotten the attention of county commissioners, and that's a good sign. But finding another tax to replace it, rather than cutting the county budget, may not be the best alternative.

If the county sales tax increase still doesn't solve the problem, the solution may at long last be spending far less.

pkadner@tribpub.com

 


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