Stroger doesn't touch property taxes,
but eating out will cost you

Thursday, January 6, 2005

By Kristen McQueary
Staff writerBefore they even cracked the covers of two 150-page budget books, several Cook County Board members said Wednesday they could not accept President John Stroger's 2005 blueprint.

Stroger proposed three new taxes to close a $73 million gap in the county's already-under way fiscal year: a 2 percent tax on restaurant bills, a 2 percent tax on hotel rooms and an annual $200 fee on coin-operated video games.

The taxes would be on top of existing eating-out and hotel taxes. If implemented, restaurant dining — whether filet mignon or a Happy Meal — or staying overnight in a Chicago or suburban Cook County hotel would cost consumers an additional 2 percent. The video tax would impact business owners with video poker or arcade games.

In all, the three taxes would raise an estimated $75.5 million from April — the earliest they could be implemented — to December. During a full calendar year, the taxes would bring in at least $100 million, according to county calculations.

Several county board members signaled their opposition to one or all of the tax increases. They'll have a chance to offer amendments over the next several weeks before a final vote is taken.

"They're grossly underestimating the cigarette tax revenue," said Commissioner Roberto Maldonado (D-Chicago), who sponsored an amendment last year to hike the county's portion of cigarette sales to $1 per pack, rather than an increase in the sales tax.

The cigarette tax has far out-performed initial projections, but Stroger's budget team said the conservative estimates for 2005 tobacco sales are based on a new Chicago tax and the possibility of a new state tax.

Combined, the price of cigarettes could cause more people to shop outside the county or quit smoking, reducing the county's take.

Maldonado said he couldn't support the restaurant tax because it hits the working poor just as much as the tourists downtown.

"A single mother, after picking her kids up from day care at 6:30 p.m., she's tired and goes through the drive-through for a Happy Meal. She's going to pay more on that meal," he said.

County finances face the same situation as last year. Health care costs continue to rise, and most county office-holders and department heads are asking for more money to accommodate service demands and rising salaries.

Cook County Sheriff Michael Sheahan, for example, asked for about $402 million for 2005. Stroger is recommending about $395 million, which includes 283 new positions in the county jail, as ordered by a federal court judge.

Sheahan's requests are similar to other department heads: He projected he would spend about $341 million in 2004 but got approval to go above that during the year to $360 million. For 2005, he requested $402 million.

Timothy Evans, chief judge of the Cook County circuit courts, projected he would spend $162 million in 2004 but got approval during the year to spend $174 million; then requested $175 million for 2005 and got approval from Stroger for just under that.

By creeping up their projected vs. actual expenditures each year, constitutional office-holders and department heads almost always grow their budgets annually, according to figures released in Stroger's budget books. The starting point for negotiating their 2005 budgets is what they spent in 2004 — not what they were supposed to spend.

Commissioner John Daley (D-Chicago), chairman of the county's finance committee, which will hear budget debate over the next several weeks, said he hopes the tax increases won't be necessary and that constitutional officers will further reduce their requests.

The county budget includes the offices of the county treasurer, assessor, recorder of deeds, county clerk, sheriff, chief judge, circuit court clerk and state's attorney, as well as funding for the county's public hospitals, courts and jails.

"We care for more patients in one day than most hospitals do in a week," Stroger said. "We fill more prescriptions at Stroger Hospital each day than 26 Walgreens pharmacies combined."

In the end, balancing the budget requires a combination of cuts and additional revenue, though several board members say Stroger hasn't cut enough.

Stroger has kept the county's $720 million property tax levy at the same level for five years and proposes to do so again for 2005. But he has targeted taxpayers' wallets in other ways by increasing taxes and fees on cigarettes, parking, entertainment, fuel, and now restaurants and hotels to sustain the $3.04 billion budget.

Stroger said he has cut 2,000 positions from county government over the past decade but not by handing out pink slips. Through attrition and early retirement, the county payroll has gone down.

Business groups were quick to criticize the new taxes in Stroger's blueprint. Gov. Rod Blagojevich leaned on dozens of business-related fees to balance his budget last year. Chicago also hiked its taxes, from cigarettes to retail sales.

"First the state of Illinois, then the city of Chicago and now Cook County. Enough is enough," said Gerald Roper, president of the Chicagoland Chamber of Commerce. "When are our elected officials going to realize they are chasing visitors, businesses and jobs out of our region and that unlimited tax increases spell long-term disaster for the economic viability of our region?"

During his 45-minute budget speech, Stroger addressed Roper several times.

"Stop beating up on this board," he said.

Kristen McQueary may be reached at kmcqueary@dailysouthtown.com or (708) 633-5972.