Chuy: I’d expand sales tax, consider luxury tax, but bankruptcy talk ‘premature’

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With little more than a week till the April 7 runoff, Chicago Sun-Times reporters spoke with Mayor Rahm Emanuel and the man he’ll face on the ballot, Cook County Commissioner Jesus “Chuy” Garcia, about their plans for handling the financial problems the city of Chicago faces and other key issues.

Jesus “Chuy” Garcia says he’s looking at “modernizing” the city’s sales-tax base by expanding taxes to include certain services not now covered. He’s also considering imposing a “luxury tax” on high-cost purchases. And he’s open to a Chicago casino only if voters agree in a referendum. An edited question-and-answer session with Garcia on finances and other matters.

Question. You’ve said you would have a committee report back 90 days after the election. By then, the General Assembly would have adjourned, isn’t it untenable to wait that long to address the city’s financial issues?

Answer. We are prepared to move forward before that. . . . We are [looking to] modernize our sales tax. . . . The thrust will be: Open the books, look at where the revenues have been going, where they need to stop going and bring the public in to understand what a true baseline is of what our finances are.

Q. When you say “modernize,” what does modernize mean to you? Does that mean expanding it to services, for instance?

A. Looking at certain services we haven’t before taxed. But we want to keep it as progressive as possible.

Q. What does that mean?

A. Oh, fur storage, things like that. People who earn higher salaries, we engage them, but exempting . . . dry cleaners and visits to the veterinarian — those kinds of things should not be taxed because they have a very regressive impact.

Q. So maybe attorney fees?

A. Yes. Accountants’ services, things like that, that would not have a bearing on lower-income earners.

Q. Would it need General Assembly approval?

A. Well, a luxury tax on certain things wouldn’t need General Assembly approval. The city could do that on its own. The sales tax, yes.

Q. Luxury tax — is that also what you mean by modernization?

A. No, that’s different. We would have the authority to act on that as a city. That would not require legislative approval. You know, if you buy a boat, if you buy something that’s really expensive, imposing a tax. Again, I put these out there as examples of the types of revenue sources, revenue enhancements that we are looking at so that people don’t get a sense that we are not thinking about it whatsoever. The financial challenge that we’re facing is unprecedented.

Q. Do you have revenue estimates for these ideas?

A. None I would verify at this point.

Q. One of your supporters, the Grassroots collaborative, came out with financial suggestions that include a city income tax and commuter tax. Do you support these ideas?

A. They’re speaking for themselves, not for my campaign. I’ve said before, a commuter tax would have a regressive impact.

Q. What about a city income tax?

A. No, that’s not under consideration.

Q. What about property taxes?

A. I’m not ready to put that on the table. It’s last on the list.

Q. How do you negotiate with labor unions after they bankroll your campaign?

A. I will negotiate with them. I think it’s important to understand the motivation of working people flocking to my campaign is they believe the city isn’t working for ordinary people for Chicago neighborhoods.

Q. Would you feel comfortable asking unions to make sacrifices?

A. There’s going to be a lot of discomfort moving forward. . . . Look at the projected deficits for both the city and the Chicago school system. We’re going to be operating in very challenging times. There’s going to be a lot of tough medicine to be swallowed.

Q. Including by the unions?

A: All stakeholders — taxpayers, unions, all the partners that make the city work.

Q. Would you ever consider bankruptcy for the city or the schools?

A. Bankruptcy is premature at this time. Chicago is very different than other locales that have had to consider bankruptcy.

Q. Are you closing the door on it?

A. I just think it’s premature, and I think, to a degree, a little bit of a panic. I’m not a panicky guy. I worry about things. I don’t panic.

Q. Financial transaction tax — where do you stand on it?

A. A financial transaction tax does work in a national framework. . . . It’s something that has validity to it because of its progressive thrust. It’s an idea we are continuing to explore. I think it works best at the national level. . . . As far as solutions for the city, it’s hard to see how something like that could benefit Chicago at the present time.

Q. A Chicago casino — Rahm Emanuel is banking on this getting through the Legislature and paying for revenue. What do you think of a Chicago casino and paying for pensions?

A. I personally don’t like casino gambling. We’re in such difficult financial straits right now that we can’t move it off the table. My approach to it would be that Chicagoans need to chime in on whether they support it or not. . . . Then, I think we need to dedicate the revenues to education and to pensions as a priority because that’s where the greatest fiscal challenges lie for us.

Q. You’re talking about an advisory referendum?

A. I think a referendum would have more legitimacy. There may be other mechanisms to get a pulse of where people are at.

Q. Graduated income tax?

A. To make that happen, of course, you need the state Legislature to chime in and a constitutional amendment. But we’re going to get there because of necessity . . . . Until we move toward a more progressive way and a fair way of generating revenues in the state, then we will continue with the fiscal crises we have every year.

Q. So you support a graduated income tax, you would push for one?

A. I would. I’ve been an advocate of one for a long time.

Q. Going back to police: Do you think that adding 1,000 police officers at this time is just not tenable economically? Would you phase it in?

A. When elected, we will move to hire 1,000 additional police officers to engage in community policing. To me, it’s a question of leadership, and it’s a question of priorities because I’ve lived in Chicago and in Little Village for 50 years. I understand if we can’t provide public safety for Chicago citizens, then people will lose their hope in government. . . .

How do we pay for it? You begin by taking half of the overtime. More adequately resourcing the Chicago Police Department in places like homicide detectives, so we increase our rate of solving more homicides.

Mayoral candidate Jesús “Chuy” García says he’d consider imposing a luxury tax and putting more services under the city’s sales tax. | Michael Jarecki/Sun-Times

Q. But there’s going have to be cuts to pay for this, right? Somewhere, something’s gonna have to be cut to pay for this stuff, right? How do we pay for 1,000 new cops without new revenue immediately?

A: There are gonna have to be new revenues. Cuts are not out of the question.

Q. You want to bring change to the City Council. What does that mean in terms of Ald. Ed Burke? Would you get rid of him as Finance Committee chair?

A. Remember, I have many relationships in the City Council, having been a former member. I value those relationships. . . . I look forward to working with members of the City Council to move the city forward.

Q. How do you have a new City Council and change without getting rid of Burke as finance chair?

A. People don’t stay the same in life. Chairman Burke isn’t the younger alderman that he was during the ’80s, when the city lived through a very difficult political period . . . . I think all of us care now, because we’re older, about legacy, about how people will judge us. I think there is a greater disposition to look for common ground.

Q. We just came from a vigil, violence, gang-bangers. Is your son Samuel now or was he ever a member of a gang?

A. My son ran with the wrong crowd. He grew up around gang members. Some of them were his friends. Some of them, he went to school with. Young people get caught up in a lot bad situations, living in challenging neighborhoods. I come from a neighborhood that’s seen more than its share of violence, its share of poverty, its share of bad things. But there are a lot of good things there.

My son made mistakes. My son learned from those mistakes. I’m not proud of the mistakes that he made. But he’s moved on to become a very good father. He’s raising four children. He is a chef, and he’s also mentored youth who have strayed from the good road in life and been an inspirational force to them.

Q. So to the extent that that’s been part of his life, is that behind him now?

A. Yes, it is. He’s now 32 years old. So he’s getting older.

Q. On the City Council — would you be open to cutting the number of members in half, or otherwise?

A. I’m not interested in cutting the number of seats in the City Council — one of the reasons being the role of money. I think aldermen who have big war chests would be favored, would have a better chance than those who raise less money.

In terms of committee chairmanships, we’ll take another look at it. I’m not prepared at this time to say we’ll reduce the number.

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