Friday, November 13, 2015

Finance Committee Supports Taxes on Hotels, E-Cigarette Vapor, Ammunition, & Ticket Resellers, Increases to Clerk of the Court Fees

2016 Cook County Proposed Budget:  Finance Committee Meeting, November 13, 2015

The Finance Committee voted to recommend all the items supported by the Administration at this meeting to consider additional revenues needed for the proposed $4.5 billion budget, as detailed below. The Finance Committee is expected to meet on Wednesday, November 18, following the already scheduled Board and Committee meetings, to consider amendments due to be filed Nov. 13 on the entire proposed budget. Following that meeting, the Board would likely vote on these revenue recommendations and the entire proposed budget. 
 
Also approved by the Committee was an Intergovernmental Agreement between Cook County and the Pension Fund (which has already been approved). This Agreement provides that $270,526.000 of the sales tax revenue will be contributed by the County to the Pension Fund in November, 2016.  This approval came after consideration of an alternative “Memorandum of Understanding” supported by Commissioners Gainer, Fritchey, Suffredin, and Murphy which would have provided for a continuing obligation beyond 2016, though this agreement, like the one approved, did have a termination provision. The Administration stated that it is expected that similar Intergovernmental Agreements will be presented as part of each future budget if the Administration’s Pension Reform Bill before the Illinois legislature is not enacted.

Hotel Tax (Item 15-6468).  As passed, effective May 1, 2016, will add a new County tax of 1% on the gross rental/room rate of all hotels, motels, and vacation stays in homes, the latter added by an amendment in order to make sure this covers Airbnb-type arrangements. This will increase the total tax in Chicago to 17.4%, the 4th highest in the country. 

A number of speakers during the Public Comment portion who represent the hotel and tourist and convention industry opposed the taxes, expressing concern that it will result in conventions looking elsewhere where the costs are lower.  The representative from Choose Chicago, the official tourist marketing agency for Chicago, said that while there was no lost business when Chicago raised the hotel tax several years ago, that was done in connection with cost-cutting reforms at McCormick Place and the creation and funding of Choose Chicago, which currently has lost its state funding. Other speakers, including representatives from some of the County’s employee unions, supported this and the other taxes so that the County would not have to lay off workers and reduce services.  Commissioner Suffredin also expressed concern that this tax was being imposed without proper planning; he questioned whether the estimated revenues from this tax were too low.

Voting to approve:  Arroyo, Boykin, Butler, Garcia, Goslin, Moore, Murphy, Sims, Tobolski, Daley
Voting against:  Fritchey, Gainer, Morrison, Schneider, Silvestri, Suffredin
Absent:  Steele

Vapor Fluid Tax (E-Cigarettes) (Item 15-6025).  As passed, effective May 1, 2016, will add a new tax of $0.20 per fluid milliliter of nicotine liquid solution depleted as a vapor product. 

During Public Comments, speakers for and against spoke on this issue.  Speakers for cited health issues.  Speakers against (those in the business of selling vapor products) said that they would move out of Cook County and the County would lose the sales taxes, as well as not see the revenues from this new tax.

Voting to approve:  Arroyo, Boykin, Butler, Gainer, Goslin, Moore, Murphy, Silvestri, Sims, Suffredin, Tobolski, Daley
Voting against:  Morrison, Schneider
Voting present:  Fritchey
Absent:  Garcia, Steele

Tax on Ammunition (Item 15-6469).  As passed, will impose new tax effective June 1, 2016 of $0.05 per cartridge for centerfire ammunition and $0.01 per cartridge for rimfire ammunition, with all proceeds to go to public safety operations.

Speakers were for and against during the Public Comment period.  Commissioners voting against this were concerned that this would again drive out businesses, thereby losing sales taxes and jobs, but would not produce sufficient revenues to combat the problem of gun violence.  Also, the tax on guns enacted by the County several years ago has been tied up in litigation, and there was concern that this tax will be contested in court.

Voting to approve:  Arroyo, Boykin, Butler, Garcia, Moore, Murphy, Sims, Suffredin, Daley
Voting against:  Fritchey, Goslin, Morrison, Schneider, Silvestri, Tobolski
Absent:  Gainer, Steele

Amusement Tax   (Item 15-6024): The Administration had withdrawn its proposal to tax cable television, as well as bowling and golf and other similar amusements, but this item is intended to make the County’s ordinance consistent with Chicago’s, and it also imposes the tax on ticket sellers and resellers who have a physical presence in the County.

During the Public Comment period, it was clarified that State law preempts the County from imposing the tax on internet auction listing services, such as E-bay, Stub Hub, etc.  The representative for the Central States Ticket Brokers Association said that it does not impose the tax per se, but wants it to be applied to all, but, as Commissioner Suffredin said, that would take a change to State law. 

Voting to approve:  Arroyo, Boykin, Butler, Gainer, Moore, Murphy, Silvestri, Sims, Suffredin, Tobolski, Daley
Voting against:  Fritchey, Goslin, Morrison, Schneider
Absent:  Garcia, Steele

Clerk of the Court Automation Fee (Item 15-5775):  Effective December 1, 2015, the court automation fee will increase from $15.00 to $25.00 and be imposed on each party in all civil cases and by the defendant in other cases.

A representative of the Illinois Association of Defense Trial Counsel spoke against this and the next fee.

Voting to approve:  Arroyo, Butler, Gainer, Moore, Morrison, Murphy, Sims, Silvestri, Tobolski
Voting against:  Boykin, Goslin, Schneider, Daley
Voting present:  Fritchey, Suffredin
Absent:  Garcia, Steele

Clerk of the Court Document Storage Fee (Item 15-5780):  Effective December 1, 2015, the court document storage fee will increase from $15.00 to $25.00 and be imposed on each party in all civil cases and by defendants in other cases. 

Voting to approve:  Arroyo, Butler, Gainer, Moore, Morrison, Murphy, Silvestri, Sims, Tobolski
Voting against:  Boykin, Fritchey, Goslin, Schneider, Daley
Voting present:  Suffredin
Absent:  Garcia, Steele

-- Priscilla Mims, League Observer

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