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Brown: No promises county tax hikes will be enough

Saturday, November 14, 2015
Chicago Sun-Times
by Mark Brown

The Cook County Board Finance Committee had just put the finishing touches Friday on its 2016 budget, approving a 1 percent hotel tax to go with its earlier penny on the dollar increase in the sales tax, when President Toni Preckwinkle offered a sobering assessment.

Asked directly by me how long the additional revenue will hold the county, Preckwinkle pointedly avoided giving any reassurances about future revenue requests during the remainder of her term.

Preckwinkle wouldn’t even say she won’t be back asking for more money in the 2017 budget.
 

“Our budgets are going to be challenging,” Preckwinkle cautioned. “I’m not going to predict what we’ll have to do in subsequent years.”

Preckwinkle noted that she had discussed that very topic earlier in the day with Finance Chairman John Daley, who pushed Preckwinkle’s hotel tax through his committee on a 10-6 vote, then added on new taxes on e-cigarettes and ammunition and extended the entertainment tax to ticket resellers.

And what did she tell Daley?

“What we talked about is how difficult our next several years are going to be,” Preckwinkle said.

Among the problems on the horizon, Preckwinkle said, is a large payment coming due on “scoop and toss” borrowings undertaken before she came into office, a reference to the dubious practice of paying for short-term obligations with long-term debt that also contributed to the city’s financial problems.

When I first asked the question, I honestly thought Preckwinkle might offer a shred of good news for beleaguered local taxpayers trying to swallow not only the county tax increases but also Chicago’s record property tax increase and the likelihood of a state income tax hike on the horizon.

But that’s probably more an indication of my failing to appreciate the depths of the county’s financial situation, which I’ve lost track of while dealing with the money woes at the state and city.

As with the other levels of government, the county’s problems stem in large part from the need to pay for its pension promises.

Most of the money from the sales tax increase will be used for that purpose, for now at least. But it doesn’t solve the problem overnight.

Commissioners debated Friday whether to add stronger language to an agreement with the county employees pension fund to make sure the additional revenue continues to flow into the pensions in future years. But a majority accepted assurances from the Preckwinkle administration that the commitment is as strong as they can wisely make.

Before the Finance Committee voted on the revenue measures, it heard from a long line of witnesses warning that the tax increases will cost the county private sector jobs — in the hospitality industry, vaping stores, gun shops and ticket brokers.

These were interspersed with representatives of unions representing county employees who said it was better that the county avoid layoffs and give them a raise.

Preckwinkle originally planned to extend the county amusement tax to cable television and recreational activities such as bowling and golf, but switched to the hotel tax when county commissioners decided it would be better to tax visitors from out of town rather than voters in their districts.

I get that, but I still would have thought the amusement tax made more sense than taking a risk on what happens when word gets around that the combined hotel tax in the city is now 17.4 percent.

In the interest of full disclosure, my wife recently took a job with Cook County Sheriff Tom Dart in a policy role. But I plan to keep writing about county government when appropriate.

In a new wrinkle Friday, a hotel industry representative testified Preckwinkle promised privately earlier this year to leave the hotel tax alone if she received the full penny sales tax hike, then apologized when she went back on her word.

Talking with reporters after the Finance Committee votes, Preckwinkle conceded that was true.

“Our operating budget proved to be more of a challenge than I expected at the time,” she explained.

That helps explain why she was in no mood to offer any new assurances Friday about what the future holds.



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