Aulde lang fine: Chicago’s 12 new taxes and fees will cost every household more than $1K

After a 2015 all too lacking in serious reform from the Windy City, Chicago residents will need to make New Year’s resolutions to tighten their family budgets.

Throughout the year, city politicians gifted Chicagoans with at least a dozen new city and county-level taxes, tax hikes and fee hikes, totaling $1.13 billion, or more than $1,100 per household.

Here are the major new taxes, tax hikes and fee hikes set to whack Chicagoans in 2016 and beyond:

New Chicago taxes, tax hikes and fee hikes

1) Chicago property-tax hike: The largest property-tax hike in Chicago history will cause the annual bill on a $250,000 home to rise by $600, assuming no other local government raises its taxes. When fully phased in over four years, the hike will generate $588 million in annual revenue. In 2016 it will be $427 million with an additional $45 million to pay for capital projects at Chicago Public Schools.

2) Garbage-collection fee: A new $9.50-a-month garbage-collection fee is expected to generate $62.7 million annually.

3) New ‘Uber’ taxes and taxi fee hikes: A new 52-cents-per-ride tax on rideshare services such as Uber and Lyft, a new 50-cents-per-ride tax on traditional taxi rides, and a $5 tax on rideshare services for every pickup and drop-off at O’Hare and Midway airports, McCormick Place and Navy Pier are expected to generate $48.6 million. The board of the Metropolitan Pier and Exposition Authority – commonly known as McPier – also quietly slapped an extra $4 tax on rideshare services for each airport pick up on Nov. 16. It is unknown how much the city expects to generate from this new tax, as WBEZ reports McPier has declined to comment on the matter.

4) ‘Netflix’ and ‘cloud’ tax: A new 9 percent tax on cloud computing as well as a new 9 percent tax on streaming services such as Netflix and Spotify are expected to generate $40 million annually, according to the Chicago Tribune. Users of subscription services have sued the city over the ‘Netflix’ tax, which was adopted without a City Council vote.

5) Building-permit fee hike: A hike in building-permit fees will generate an estimated $13 million.

6) E-cigarette tax: A new $1.25 tax on the sale of e-cigarettes and a 25-cent-per-milliliter tax on the accompanying fluid will raise an estimated $1 million a year

New Cook County taxes, tax hikes and fee hikes

7) Sales-tax hike: A sales-tax hike will bring Chicago’s combined sales-tax rate to 10.25 percent from 9.25 percent – the highest combined rate among large U.S. cities. Cook County budget documents estimate the tax will bring in $474 million in its first full year.

8) Hotel-tax hike: A new 1 percent tax on hotels and motels will push the overall hotel tax in Chicago to 17.4 percent and generate an estimated $15.4 million in tax revenue.

9) Lawsuit-fee hike: A $20 increase in additional fees for every lawsuit filed is expected to bring in $4.9 million.

10) E-cigarette liquid tax: A new 20-cents-per-milliliter tax on liquids used in e-cigarettes will generate an estimated $1.5 million.

11) Ticket-reseller tax: By expanding the county’s existing amusement tax, the county will levy a new 3 percent tax on ticket resellers such as Wrigleyville-based SitClose Tickets. Originally, Cook County Board President Toni Preckwinkle suggested expanding this tax to cable TV and recreational activities such as bowling and golf, which, along with the ticket-reseller tax, was a change expected to generate $20.25 million. That expansion was dropped in favor of a hotel-tax hike, but the new ticket-reselling tax remains, which will generate a meager $750,000.

12) Ammo tax: A new tax on ammunition, ranging from 1 cent to 5 cents per round is estimated to generate $320,000

And that’s not all.

The list above doesn’t include hikes in fines for vehicle-boot removal (to $100 from $60), maximum fines for businesses that don’t shovel sidewalks (to $500 from $50), and fines for individuals driving without insurance (to $1,000 from $500). Revenue estimates aren’t available for the latter two changes, but the city thinks the boot removal hike will bring in $2.2 million a year.

With this massive new cost dropped on Chicago families – who already pay a far higher tax and fee burden than residents of any other Illinois city – one might expect city and county governments to tighten their purse strings as well. This is far from the case.

Cook County spending is set to increase by $500 million next year, and city spending will increase by $84 million.

The two largest hits to families’ bottom lines, the Chicago property-tax hike and the Cook County sales-tax hike, will both go primarily to fund government-worker pensions.

Perhaps worst of all, more tax hikes are just around the corner.

Cook County Board President Toni Preckwinkle won’t rule out further tax increases, and Chicago aldermen know their junk-rated city will need to keep scrounging for new revenues for years to come.

More than a billion dollars in new money taken from hardworking residents, and no reform to show for it – this is the Chicago way. A decadeslong failure in leadership now jeopardizes the future of a once-great city, from which residents are fleeing for brighter futures every day.

To get City Limits in your inbox every week, subscribe to the mailing list below.

 

Filed under: Uncategorized

Tags: chicago, fees, taxes

Leave a comment