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Food, hotel officials oppose tax

Friday, February 04, 2005
Daily Herald
by Jon Davis

Cook County's convention, hospitality and restaurant industries give the county's economy 190,000 jobs and a $12 billion annual shot in the arm.

But local representatives of those industries warned those benefits are threatened by Cook County Board President John Stroger's proposal to close most of a $73 million county budget deficit with an additional 2 percent hotel-motel tax and a 2 percent food and beverage tax.

In a meeting with the Daily Herald editorial board that included various industry groups, Marc Gordon, president and CEO of the Illinois Hotel & Lodging Association, said Stroger's proposal would push the Chicago area's hotel and food taxes among the highest, if not the highest in the country, and drive conventions into the waiting arms of competing cities whose tax rates are already much lower.

Colleen McShane, president of the Illinois Restaurant Association, said a county food and beverage tax would hit restaurant employees hardest because employers will cut hours and jobs if they can't keep up with expenses.

She said it would also hit diners, who now are eating out more frequently than ever because of increasingly busy lives.

"This is not just the person who can afford to sit down at Charlie Trotter's," McShane said. "This is a Happy Meal tax."

Gordon said the new taxes, when added to existing state and local taxes, risk repeating New York City's debacle in the last decade. A 6-percentage-point hotel and food tax hike in 1990 left the Big Apple's hospitality industry in shambles.

They learned their lesson the hard way and are still recovering from that tax even though it was repealed just four years later, Gordon said.

Stroger proposed the tax increase last month when he introduced a $3 billion budget for the county, saying they would raise $70 million in 2005.

Stroger spokeswoman Karyn Stancik disagreed that Chicago will lose its appeal for conventions and tourists. She said the proposed taxes are necessary to the county's services, including public health and operating the jails and circuit court system.

Commissioners may have wrung an additional $12 million in budget cuts from county officials, but that still leaves $56 million, so the taxes remain on the table, Stancik said.

"The president is more than willing to compromise if people can identify other alternatives," she said.

At least two suburban county commissioners said Thursday those proposed taxes are dead on arrival.

"The bottom line is there's not even close to nine votes (to approve them)," said Commissioner Gregg Goslin, a Glenview Republican whose district includes several Northwest suburbs.

Commissioner Carl Hansen, a Mount Prospect Republican, agreed, adding the idea of further budget cuts "seem to be finding a receptive audience" among Stroger's staff.

County commissioners meet Monday to discuss more budget cuts and must submit budget amendments by Thursday. The county board is scheduled to vote on the 2005 budget on Feb. 23.

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