Editor’s note: A column by Ald. Will Burns (4th) in last week’s Herald presented three ideas to raise revenue for the city. We asked a staff member to provide further explanation about these ideas.
By Jeffrey Bishku-Aykul
In Ald. Will Burns’ (4th) column in last week’s issue of the Herald, the city council member listed three proposals to bridge the city’s pension budget gap.
The first proposal concerned a temporary 67 percent income tax hike approved in 2011 by Gov. Pat Quinn and the legislature that is slated to roll back next year.
If the tax continues — Quinn has suggested making it permanent — Burns proposed that Chicago gets its fair share of the spoils.
When the 2011 tax hike was initiated, the portion of income tax revenue Illinois municipalities receive dropped from 10 percent to 6 percent. Burns would like to increase that share, citing estimated losses of $413 million since the hike.
“That’s money that would involve state authorization,” said Lars Weborg, director of policy and communications for Burns. “So, essentially it’s up to Gov. Quinn to release those funds to the city.”
Burns also proposed implementing congestion pricing in Chicago, by which motorists would pay a fee to drive at peak hours through the city’s Central Business District.
“As of right now, the alderman is just kind of introducing the concept,” said Weborg, adding that there are “a lot of moving parts with congestion pricing.”
Finally, Burns listed a service sales tax as yet another way to generate additional revenue.
Chicagoans already pay a 9.25 percent total sales tax on goods, but no tax for services.
Burns used the example of a lawnmower to detail its purpose: If a person buys one, he or she pays a tax, but if he or she hires someone else to mow their lawn, there is no tax.
“And that’s true of legal fees, of medical fees and haircuts,” said Weborg.
“Service sales tax is definitely something that exists elsewhere,” he added.
Exactly what services would be taxed here in Chicago remains uncertain, but many states already levy a tax on some services, including limousine rides and pest control.
Introducing a service sales tax is an idea that has been floated in Illinois politics for decades and Mayor Rahm Emanuel campaigned in 2011 on levying one in Chicago — albeit only for luxury services.