Tag: tax revenue

Reviewing the City Council subcommittee’s sixteen revenue-raising ideas

September 16, 2024 / / 0 Comments

Mayor Johnson asked 6th Ward alderperson William Hall to solicit ideas about how to fund the City of Chicago budget. The Chicago Tribune reported on these:

The Google [Forms] survey he included asked aldermen to respond “Yes” or “No” to the following ideas, with no added descriptions: “Sales Tax on Services; Property Tax (CPI Increase); Monthly/Wireless Plan Tax; Increase in LGDF Share; Head Tax; Alcohol Tax; Checking Bag Tax; Video Gaming Tax; Grocery Tax; City Sticker Increase; Congestion Tax; Income Tax Surcharge; Package Tax; Vacant Lot Tax; Ticket Reseller Amusement Tax; Enterprise Zones.”

I’ll briefly describe each one based on my own knowledge of these taxes. Note that these are possibilities and not suggestions.

  • Sales tax on services. Chicago doesn’t have a sales tax on most services (think haircut or tax preparation). (Chicago has a tax on some services, like the “Personal Property Lease Transaction Tax” which applies to services that use cloud computing, including Netflix!)
  • Property tax increase based on inflation. Mayor Lightfoot implemented this for a few years but Mayor Johnson did not renew it.
  • Wireless plan tax. This one confuses me because Chicago already taxes monthly cellular service.
  • Increase in LGDF share. LGDF is the State of Illinois local government distributive fund and the idea here is to convince the state legislature to increase the share that that the City of Chicago receives. Some data points that I think could be in favor of increasing the city’s LGDF share: Cook County receives back only 88% of what it contributes to state taxes (Paul Simon Public Policy Institute, page 37).
  • Head tax. This is a tax employers would pay for each employee they have. Mayor Emanuel and City Council phased out the head tax in 2014.
  • Alcohol tax. Chicago applies its own liquor tax, currently starting at $0.29 per gallon of beer up to $2.68 per gallon for anything containing 20% or more ABV.
  • Checking bag tax. I presume this refers to the existing Checkout Bag Tax, which is set at 7 cents per checkout bag sold at retail stores (the store can keep 2 cents of this to help subsidize the cost of the bag).
  • Video gaming tax. This would mean legalizing video gambling and taxing it.
  • Grocery tax. Governor Pritzker and the Illinois General Assembly eliminated the 1% grocery tax starting in 2025, revenues from which are distributed to municipalities. In return, the state allowed cities to implement their own grocery tax. Richard Day opines why it would be a bad idea for Chicago to implement such a regressive tax.
  • City sticker increase. A city sticker is a fee for the privilege of being able to park a car for free across much of the city.
  • Congestion tax. This would create a fee, surcharge, or tax for the privilege of driving a personal vehicle, and for the city to recover the costs and negative impacts, into the downtown area during specified times.
  • Income tax surcharge. I’m not sure what the surcharge means but Chicago currently doesn’t have an income tax.
  • Package tax. I don’t know what this means, but Hall told the Chicago Tribune that the package tax would “look at weights and distribution of packages that move throughout the city.”
  • Vacant lot tax. This would probably act as a kind of land value tax but would probably be implemented as an additional property tax on vacant lots (I assume any parcel that the county classifies as “1-00” would be eligible for this).
  • Ticket reseller amusement tax. Another tax that already exists; presumably this would be increasing the tax paid by people buying tickets for amusements (which includes concerts – you can see a list of all of the registered amusement tax businesses).
  • Enterprise Zones. I can’t make sense of this because Enterprise Zones are an existing state incentive area; there are six in Chicago. This “give” money (in the form of state sales tax breaks on construction materials and waiving the state’s portion of the real estate transfer tax in some situations) to property owners.
A vacant lot in Bronzeville. Land value tax would fix this.

Further reading

The Civic Federation came up with their own list of possible revenue sources and indicated if they require a state statute to authorize.

Chicago’s big box saga continues

July 17, 2010 / / 0 Comments

The Chicago big box saga is a tale of who gets to build where, how big, and how much wage it pays. It can be extended to include debates on store design.

While big box stores were built here before the first Wal-Mart in Chicago, the saga begins with that megastore. The City Council passed a “living wage” ordinance (also called the big box wage ordinance) that required stores with over 90,000 square feet and $1 billion in revenue to pay their employees a minimum of $10 per hour, and an additional $3 per hour in fringe benefits. The Mayor vetoed the ordinance. Wal-Mart built its store in the Austin neighborhood and paid their normal wage (in 2010 it seems to be $8.75). It won’t be until 2011 (at the earliest) that the second Wal-Mart will open in Pullman.

An urban-friendly Best Buy in the same complex as a senior citizen assisted living center.

Meanwhile, Target opens new Chicago stores in McKinley Park and West Rogers Park (on Peterson Avenue), both in 2006. Best Buy opened stores on Elston Avenue, Belmont Avenue, Clark Street, Roosevelt Road, and Michigan Avenue. Kohl’s, a discount department store, opened a store alongside Best Buy on Elston (to the tune of 130,000 square feet, on par with Wal-Mart) in 2005. Home Depot and Menards have also opened stores since the big box ordinance veto in 2006 seemingly without a hitch.

This month, Target proposed to a group of residents and the 2nd Ward Alderman, Robert Fioretti, a new store at Jackson and Aberdeen in the West Loop. Many residents were disappointed by the store design. At least one resident didn’t understand the need for a store with the South Loop store on Roosevelt so close.

How the saga can end

The prevailing wages at big box stores in Chicago should be researched. The current research about Wal-Mart and big box stores’ tax revenue contributions should be validated by additional studies. There are several universities up to this task, and mine, the University of Illinois at Chicago, has released multiple studies – here’s one about localized job creation and elimination.

With solid background information, alderman and city agencies, as well as residents, can potentially make better informed and more effective decisions about the future of large-scale retailing in Chicago.

More of this please (Home Depot hardware store in dense neighborhood)…

…And less of these.

Lastly, the City Council and Zoning and Planning departments should set design standards for this style of shopping to ensure urban friendly and transit oriented developments. Home Depot and Target should be lauded for their stores on Halsted Street in Lincoln Park (more info), and on Roosevelt Road in South Loop, respectively*. However, each has since built their typical suburban monstrosities in other neighborhoods, that neither recognize that some customers would like to arrive by car (instead by transit or bike), nor consider the environment (minimum-size parking lots make a large contribution to the city’s current problems managing stormwater runoff). Future Wal-Marts should promote sustainable design.

First and second photos by Payton Chung. Third photo by PonderInc.

*While the Target in McKinley Park (Chicago) is LEED Certified, the South Loop store probably has an annual lower carbon footprint because of all the visitors who arrive by transit and bike. The South Loop store is near a major train station and several bus routes (at least five). The McKinley store is on a highway and two bus routes.