Finance Committee approves Emanuel’s $62.4 million tax package

SHARE Finance Committee approves Emanuel’s $62.4 million tax package

Taxes will be going up on everything from parking and vehicle leasing to cable television and skyboxes, under a $62.4 million revenue package advanced Monday to help bankroll Mayor Rahm Emanuel’s 2015 budget.

“We may not like it, but it’s something we can all live with,” said West Side Ald. Jason Ervin (28th).

With a pre-election property tax increase averted by a telephone tax hike approved last summer, there was virtually no debate, either on the $62.4 million tax package approved by the Finance Committee or on the $7.3 billion spending plan itself advanced by the Budget Committee.

In fact, Finance Chairman Edward Burke (14th) asked if there were even more tax “loopholes” that might be closed to generate sorely needed revenue — by imposing the city’s restaurant tax on websites like Open Table that arrange restaurant reservations.

But that doesn’t mean there’ll be no pain for Chicago consumers.

The $12 million plan to wipe out the amusement tax exemption that has long benefited cable television companies will cost the average cable customer $2.40 more per month — $28.80 more per year — assuming it’s passed along to consumers. That’s a pretty safe assumption.

Chicago levies a 9 percent amusement tax on movies, concerts, sporting events, live theater and entertainment venues with a seating capacity of more than 750. For years, cable companies got a 5 percent break — and paid an amusement tax of just 4 percent — to offset their franchise fee.

Last year, Emanuel took the cable tax break down to 3 percent. This year, he’s eliminating it entirely.

The parking tax currently stands at 20 percent weekdays and 18 percent on weekends, with 87 percent of the revenue generated by garages in the downtown area and at O’Hare Airport.

The increase  — to 22 percent on weekdays and 20 percent on weekends — will be the third in the nearly four years since Emanuel took office.

It’s a popular punching bag for the mayor, in part, because it’s part of a larger plan to discourage driving by building protected bike lanes and bus rapid transit lanes that shrink the number of lanes available for passenger vehicles.

This time the mayor plans to use the revenue for a popular cause: to generate the $10 million needed to double the year-round army assigned to patch potholes and repair crumbling streets.

Downtown Ald. Brendan Reilly (42nd) and Marc Gordon, president and CEO of the Illinois Hotel and Lodging Association, have called the parking tax piling on and warned of a “tipping point” where higher parking costs negatively affect tourism and business.

That’s not the only hit motorists will be asked to absorb in 2015.

Chicagoans who lease their vehicles — whether in the city or suburbs — will be required to pay a 9 percent “personal property lease tax” — up from 8 percent currently. The increase also affects businesses that lease software, printers and computers. But nearly 43 percent of the $15 million increase is expected to come from auto leasing.

The revenue package also counts on raising an additional $4.4 million by forcing the owners of skyboxes at Soldier Field, Wrigley Field, the United Center and U.S. Cellular Field to pay the city’s 9 percent amusement tax instead of getting a 40 percent break.

“That was put into place a number of years ago when the value of the skybox included other purchases like parking and food. The business model has changed,” said Budget Director Alex Holt.

“To the extent that those things are included and the purchaser is paying those other taxes, then we will credit those other city taxes.”

And the mayor hopes to generate $17 million by closing a loophole that has allowed companies to avoid Chicago’s sales and use taxes by renting sales offices in Kankakee or Channahon to complete the purchase of fuel and other big-ticket items.

Companies will be able to claim a use tax credit in Chicago only if they pay the sales tax somewhere else, under the change.

The targeted tax hikes would have been greater if the City Council hadn’t already done the heavy lifting — before gearing up for re-election.

In late July, aldermen approved a 56 percent increase in the monthly surcharge tacked onto telephone bills to meet the city’s increased obligations to the Municipal Employees and Laborers pension funds.

That allowed the mayor to cancel his plan to raise property taxes by $250 million over five years and honor a promise made to Gov. Pat Quinn in exchange for the governor’s signature on the Chicago pension reform bill.

Emanuel has refused to say how the city would meet those rising obligations going forward, when the telephone surcharge will fall short.

Monday’s votes set the stage for the full City Council to approve both the budget and the mayor’s tax package on Nov.  19.

Chicago tax increases

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