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Preckwinkle defends latest tax increase instead of cutting budget

Monday, November 09, 2015
Chicago Tribune
by Hal Dardick

Facing a wave of criticism from business interest groups, Cook County Board President Toni Preckwinkle on Monday defended her latest tax-increase proposal: a new 1 percent county hotel tax that would push the total rate in Chicago to 17.4 percent.

"This is a very modest increase — very modest — $1 a night on a motel stay, $3 or $4 a night on a stay at Four Seasons," Preckwinkle said. "I don't think that's going to discourage anybody from coming to Chicago, nor considering Chicago as the site of a convention."

The hotel tax comes after she pushed through a July penny-on-the-dollar sales tax increase that takes effect Jan. 1. That tax increase will give Chicago a 10.25 percent sales tax rate, highest among big U.S. cities. The $474 million a year is earmarked largely for government worker pension costs.

Preckwinkle originally wanted to extend the county's 3 percent amusement tax to cable TV and recreational activities such as bowling, golf and many for-profit sports leagues to raise about $20 million. But she switched to the hotel tax after it became clear she lacked the votes needed to approve the amusement tax increase.

Asked Monday why she couldn't avoid the hotel tax by trimming $20 million out of a $4.5 billion budget, Preckwinkle framed up the issue as wanting to avoid cuts to vital programs. Without the hotel tax revenue, she said, the county would have to lay off more than 200 employees.

"We'd lose public defenders, and we'd lose state's attorneys and we'd lose others in the public safety arena that would have a real impact on our ability to deliver services and our mission," said Preckwinkle, echoing Mayor Rahm Emanuel's approach this fall when he suggested the City Council could either approve a record property tax increase or lay off scores of police officers and firefighters.

Preckwinkle did not say, however, why it would be prosecutors getting laid off instead of other workers in the vast county government bureaucracy.

The County Board president, re-elected a year ago without opposition, is preparing for a Friday vote on the hotel tax. Winning approval would allow her to count on the resulting $31 million a year in revenue before next week's vote on her overall 2016 spending plan.

Eight commissioners have signed on to sponsor the hotel tax, leaving Preckwinkle just short of a majority on the 17-member board. But she said Monday she "believes" she has the votes.

The arm-twisting began last week, when Commissioner Richard Boykin, D-Oak Park, said he agreed to support the hotel tax after Preckwinkle agreed to back his proposal to tax gun ammunition — a tax also now slated for a preliminary vote Friday. Asked four times after Monday's board meeting if she engaged in that logrolling, Preckwinkle did not directly answer the question, instead explaining her support for the ammo tax, noting she made a similar proposal three years ago.

The bullet tax would be 5 cents per round for "centerfire ammunition" and 1 cent per bullet for "rimfire ammunition." It would raise about $320,000 a year.

As Preckwinkle continues to try to persuade commissioners to vote for her latest tax increase, board members also expect to face a heavy lobbying effort from hotel tax opponents, including the Chicagoland Chamber of Commerce and trade groups representing hotels and restaurants.

"With this proposed 1 percent increase in the hotel tax in Cook County on top of what will be one of the highest sales taxes in the nation, it seems like the county is actively finding ways to making visiting, touring and dining in the Chicago area less affordable and less appealing to travelers and conventioneers alike," said Sam Toia, president and CEO of the Illinois Restaurant Association.

Preckwinkle, however, was dismissive of the effects of the sales tax on people planning to come to Chicago.

"I never consider what the sales tax rate is in a place when I go visit it," she said. "I think that's ridiculous. That's a ridiculous assertion."



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