Watching FX’s "American Horror Story" and hitting the golf course could become more expensive. Under a budget proposal unveiled by Cook County Board President Toni Preckwinkle last week, the county would expand its 3 percent amusement tax to cable television and recreational activities, like golfing and bowling, to help plug a projected $198.9 million budget hole.
“The amusement tax, you have to understand, it’s an extension. If you went to the movies or plays, you’ve already paid an amusement tax. But if you were golfing or bowling, maybe you didn’t at least [pay] the county amusement tax. So we’re extending it to things that weren’t covered before,” Preckwinkle said. “We’re not raising it. If you bowl for an hour and it costs $10 an hour, you pay an additional 30 cents. If you golf 18 holes, it’s an additional dollar. It’s really modest, and people who engaged in other forms of entertainment were already paying it.”
“It is a tough sell. If they have any other revenue ideas, hopefully they will offer them.”
–Cook County Commissioner John Daley
The proposed closing of amusement tax loopholes will generate an estimated $20.25 million next year, while a new tax on e-cigarettes and e-vapor products is expected to generate $1.5 million based on a 20-cents-per-milliliter tax. The chart below illustrates a breakdown of $107.8 million in cost reductions included in the FY 2016 budget.
The budget plan comes months after the board approved the controversial penny-on-the-dollar sales tax increase sought by Preckwinkle, who was elected in 2010 after pledging to repeal a similar tax implemented by predecessor Todd Stroger. Preckwinkle says the tax increase is needed to help address the county’s $6.5 billion pension fund shortfall.
“We have pension liabilities, unfunded liabilities of $6.5 billion, and we’re accruing additional obligations at the rate of $1 million a day. If you think about it, if you have a credit card and you never pay the principal or interest, you accrue more debt,” Preckwinkle said. “I thought it was unconscionable that we didn’t take action to try and address that tough issue. We brought legislation to Springfield in 2014 and 2015, and couldn’t get legislative action, so we decided to do what we could on or own.”
“We sent a letter to the mayor on Friday including a half dozen items we were concerned about.”
Cook County Commissioner John Daley, a Preckwinkle ally and chairman of the county’s finance committee, said rounding up support on the board for the amusement tax expansion won’t be easy in the wake of the sale tax hike.
“It is a tough sell,” Daley told reporters after Preckwinkle’s budget address. “If they have any other revenue ideas, hopefully they will offer them. But again, when the sales tax was passed, everyone said, ‘Well, why don’t we rely on [the] property tax?’ The president and I met with every single one of them and said, ‘If you want a property tax increase, then offer it.’ And not one of them came forward.”
Following her executive budget recommendation last week, Preckwinkle made a statement that cast doubt on Mayor Rahm Emanuel’s plan to offer a homestead exemption as he seeks a record high property tax increase in his budget.
“We sent a letter to the mayor on Friday afternoon including a half dozen items we were concerned about,” Preckwinkle said, declining to elaborate on what those concerns are. “What I’ve said is we all met with all of the principal actors on Friday, we outlined a half dozen concerns that we had. … We haven’t gotten a response [from the mayor], and we did get legislation at 5:30 p.m. today, which was the first thing we asked for."
Watch the full interview with Preckwinkle above.
The Cook County Board of Commissioners will vote on the budget in mid-November. Listed below are upcoming budget hearings:
- Wednesday, Oct. 28 at 6:30 p.m. in courtroom 098 at the Sixth District Courthouse located at 16501 S. Kedzie Parkway in Markham.
- Thursday, Oct. 29 at 6:30 p.m. at the Skokie Courthouse, located at 5600 Old Orchard Road.
- Tuesday, Nov. 3 at 9 a.m. at the Cook County Building, located at 118 N. Clark St. in Chicago.
- Thursday, Nov. 4 at 6:30 p.m. at the Fourth District Courthouse, located at 1500 S. Maybrook Drive in Maywood.
The schedule is subject to change; check the Cook County’s Budget Calendar for updates.
What others are saying
Crain’s Chicago Business called Preckwinkle’s budget “bitter medicine” in its Oct. 17 editorial. While the editorial recognized strides Preckwinkle is taking to address the county budget, it decried her decision to expand the amusement tax while giving “across-the-board raises that exceed the rate of inflation.” The editorial also questioned why $20 million in cuts couldn’t be found in a general fund of $1.43 billion and suggested a few cuts the county could make.
Chicago Tribune columnist Phil Rosenthal called the proposed expansion of the amusement tax unnecessary and points out that of the $20.25 million expected to be generated from this expansion, $18 million will come from taxing cable TV. Despite the tax increases and expansions, Preckwinkle maintains the county will continue to do well economically. But Rosenthal notes: “At some point, however, if it's not death by a thousand pin pricks for that quality workforce, then it's the impetus to move where there are fewer pins and they're not stuck so deep.”
The Chicago Tribune’s editorial board expands upon this, stating, “The county’s approved and proposed taxes are on top of the property tax hike Mayor Rahm Emanuel has proposed,” as well as taxes by other governmental bodies. The Tribune editorial credits Preckwinkle for dedicating more money to county pensions as well as reducing the county’s head count, but goes on to say that's “no comfort to taxpayers in Chicago who live in a constant state of whack-a-mole,” as they pay higher taxes to one body and another pops up asking for more too.