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 4^th 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

Hotel Tax and Ammunition Tax Added to Budget Considerations

2016 Cook County Proposed Budget:  Board Meeting, Nov. 9, 2015

The Cook County Board referred two proposed new taxes to the Finance Committee for consideration as part of the 2016 budget proceedings.  The Finance Committee is scheduled to meet on Friday, Nov. 13 at 1 pm to consider these new taxes, as well as other previously introduced new revenue sources.  This follows past practice whereby the Committee votes on revenue proposals first, then at a later date considers the budget as a whole.  This subsequent budget meeting is scheduled for Nov. 18.

President Preckwinkle, along with 8 Commissioners, is sponsoring a new ordinance that would impose a 1% hotel accommodation tax effective May 1, 2016.  Nine Commissioners are needed to pass this proposal.  During the Public Comment period, the General Manager of the Hyatt Regency Hotel, who is also on the Executive Committee of Choose Chicago, spoke against the proposed tax.  He stressed that the hotel tax will hurt Chicago in competing for conventions, whose main competition is with Orlando and Las Vegas which have hotel taxes of 12.5% vs. 17.5% which would result from this additional 1%.  Sixty-five percent of the business of his hotel is dependent on conventions.  Some Commissioners questioned whether the 1% increase ($1.85 per day on a room rate of $185) would really be a deterrent.  The speaker said that this increase would be a deterrent to those arranging conventions.

The other proposed tax, sponsored by President Preckwinkle and Commissioner Boykin, would impose a 5 cent per cartridge tax on centerfire ammunition, and a 1 cent per cartridge charge for rimfire ammunition, effective June 1, 2016.  The Executive Director of the Illinois Council on Handgun Violence urged that this tax be passed, stressing the costs being incurred by government and citizens to deal with gun violence.  The speaker said that people in Chicago incur $2.5 billion a year in costs attributable to medical, police, and judicial functions related to gun violence. 

-- Priscilla Mims, League Observer

No Lack of Input at Second Public Hearing on Proposed Budget

2016 Budget Public Hearing:  Maybrook Court House, Maywood,  November 5, 2015,  6:30 PM.

The hearing began on time and had 12 commissioners present. The hearing was chaired by Comm. Boykin. 

Approximately 25 people spoke, some alone and some on behalf of groups with many people standing at the podium.
Many people spoke out against the e-cigarette tax, one even claiming that such a tax would increase the amount of people who smoked regular cigarettes. One speaker was the owner of a “Vape” shop and worried about the loss of business that might occur. Also noted were several speakers who wanted more money for Restorative Justice programs. A group called Peacekeepers handed out sheets of statistics to the commissioners about lowering recidivism rates. These folks were very polite and thanked the board for the $500,000 donation to their group. Conversations about budget balancing ensued. Finally, Reclaim Chicago spoke about the Responsible Business Act. It basically taxes employers who pay less than a fair wage.

   

Some other interesting speakers included the Mayor of Lyons who complained about the 3% Amusement Tax hurting seniors the most. The Commissioners thanked this mayor profusely for the recent regulations placed on the gun shop in Lyons. Other speakers complained about the same tax. Comm. Daley stated that this tax probably would not happen.

A doctor from Access to Care based at Loyola Medical Center in Maywood asked for more funding. Some discussion ensued about treating illegal immigrants. Comm. Suffredin said that he would work with this program to try to come up with a solution to this problem. Others complained about county taxes treating illegals. Comm. Garcia said CCHHS has a mission to treat everyone equally and doctors have an oath to treat the sick.

The SEIU (state unionized workers) speaker complained about cutting the grafitti removal team because it has been very successful. A speaker from Safer Foundation thanked the board for its support in the past. Several cancer patients thanked the board for County Care and the expansion of Medicaid. Many had had no health care at all until 2 years ago.
 

A huge group from TASC (Treatment Alternatives for Safe Communities) came to the podium. They explained their mission and looked forward to working with the State’s Attorney's Office and the Jail by expanding diversion programs. Another speaker asked for more county facilities to be compliant with the Americans with Disabilities Act. She complained about both downtown county buildings and the difficulties wheelchair bound people have negotiating some of the doors and elevators.

   

The most emotional part of the evening came when one speaker (calling himself “just a taxpayer") complained about the increasing sales tax which makes Cook County have the highest sales tax in the nation. Comm. Sims said that it was a fair tax because it hits everyone who shops in Cook County evenly. She became emotional when she told everyone how difficult it was to balance this budget when all groups are asking for more money.

--Submitted by Jan Goldberg

Improving on Technology Front, But County Still Has a Ways to Go

2016 Cook County Proposed Budget:  Bureau of Technology and Board of Commissioners, Oct.27, 2015

Bureau of Technology

Simona Rollinson, the Chief Information Officer (CIO), explained that the Bureau is moving away from customized solutions to looking at commercial, off-the-shelf solutions which are more reliable and take far less time to implement.  In addition, they are looking at multi-phase development for incremental change.  She heard many complaints that in the past the Bureau would spend years working on a new system, only to find that when it was ready to be implemented, it was out of date. 

This new approach requires special skills, which is why 1/3 of the Bureau are either new hires or new promotions.  While the number of employees is down, the total salaries are up for 2016, reflecting what is needed to both hire and retain employees with the necessary skills.  There were several questions by Commissioners about some of the salaries, and the CIO was to get back to them. 

Ms. Rollinson cited a number of accomplishments in 2015, including the awarding of contracts for the “Big 4” new systems:  the Integrated Property System, the Integrated Revenue System, the Integrated Justice System, and the County-wide Enterprise Resource Planning System. Implementation will begin in 2016.

For many years the Commissioners have expressed concern over the separate systems in each of the different elected officials’ offices.  Ms. Rollinson said that 2015 saw the rollout of the new process whereby any new contract for technology anywhere in the County must first obtain the concurrence of the CIO.  This should reduce duplication and encourage collaboration, even though technology personnel still remain in each of the separately elected officials’ offices.  Several Commissioners stated they were willing to help encourage the elected officials to cooperate with the Bureau as needed.  Chairman Daley said one way the Board can help is to not authorize money for individual systems unless a department is cooperating.

Commissioner Schneider said that in the past the Board has authorized many dollars to be spent on technology with the expectation that this would result in a reduction in personnel.  But this has not happened in most cases.  The CIO stated that she thinks that the new Time and Attendance system being implemented will show results. But she also said that the question about technology improvements and employee count needed to be directed to individual departments.

Commissioner Boykin asked how the CIO would grade the County in terms of technology.  The CIO said that it was moving toward being comparable to other counties of its size, but that means that more improvement is necessary.  Commissioner Tobolski asked whether the County would be able to implement the Chicago Mayor’s proposal in Springfield which would exempt properties less than $250,000 from the new increase in property taxes just approved in the city (or provide rebates).  The CIO stated that the County had just received the bill the prior Monday and were evaluating what would be required.  Commissioner Steele offered to connect the Bureau with the Seattle Assessor’s office which has utilized its Geographic Information System (GIS) to grow economic development and which has a wonderful integrated property system. 

Board of Commissioners

The Secretary to the Board, Matthew DeLeon, presented the budget for the Board, which includes the Secretary’s budget.  Overall, the total budget is up $203,000, or 2.7%, most of that for salary increases for staff (the Commissioners’ salaries are set by ordinance, and have not been raised in many years).  There was some discussion about the fact that several years ago all the Commissioners’ budgets were equal, but that is no longer the case. Commissioner Boykin stated that his office is not implementing any new salary increases out of concern for the impact on the poor and seniors as a result of the sales tax increase.  Commissioner Schneider made the point that he has never utilized his entire approved budget, in effect giving back money to the County each year.  Commissioner Sims suggested money could be saved if there was a central office supply purchasing plan, rather than each office purchasing its own supplies.

Commissioner Schneider asked about the reference in the Capital Budget for changes to the Board Room. Mr. DeLeon explained that the goal is to make the Room accessible for the public, the Commissioners, and the County staff, which it clearly is not now.  The 2016 Capital Budget contains money to start on this.  Commissioner Tobolski asked why they can’t go ahead and purchase a couple large television screens to project agendas and presentations.  After Mr. DeLeon stated some issues that had to be considered first, Mr. Tobolski (jokingly?) offered to purchase them himself.

Several Commissioners complained about the salary increased in other County departments, in contrast to their own salaries.  Chairman Daley reminded them that they have the power to increase the salaries for Commissioners, but that any increase would not take place until after the next election for Commissioners, in 2018. 

Commissioner Sims expressed concern over speakers who utilize the public comment time to make derogatory comments and/or fail to stick to a subject on the agenda for a Board or Committee meeting.  Mr. DeLeon stated that per the State’s Attorney General, a public comment time must be offered to all, but that the chair does have the authority to regulate the speaker should the speaker go off topic. 

-- Priscilla Mims, League Observer