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News / City Life

Chicago, your sales tax is about to go up by one percent

Chicago, your sales tax is about to go up by one percent
Photograph: Daniel X. O'Neil/Flickr

The Cook County Board of Commissioners approved a measure by a vote of 9 to 7 that will increase the county's sales tax by one percent. The new rate will be 10.25 percent, making it the highest sales tax in the entire country. 

In an op-ed published in the Chicago Tribune earlier this week, Cook County Board President Toni Preckwinkle pointed out that the county's shortfall on pension obligations currently stands at $6.5 billion and continues to grow at $1 million a day. A pension reform plan has been in the works for more than two years, but after a constitutional challenge and a slew of bureaucratic red tape, Preckwinkle claims that Cook County can no longer wait.

"We can't keep kicking the can down the road," she wrote. "We can't engage in smoke and mirrors financing schemes."

Preckwinkle has not released a budget for the allocation of the new tax revenues, but promised that, during its first year, 90 percent of the new revenue will address the county government worker retirement system's shortfall. In its second year, she claimed that more than 70 percent will go toward the pension fund.

The tax increase received a good deal of pushback from several members of the Board of Commissioners. After all, sales tax is regressive—meaning lower-income taxpayers contribute a higher percentage of their income than the higher-income taxpayers. A recent report from the Institution on Taxation and Economic Policy showed that Illinois has the fifth most regressive tax structure in the nation. The poorest 20 percent of Illinois residents account for 13.2 percent of the state's tax revenue.

Commissioner Jesus "Chuy" Garcia voted yes on the sales tax increase. He took Mayor Rahm Emanuel into a runoff election in April, campaigning on a progressive agenda to fix the city and county's pension crisis. He claimed that by approving the tax increase, Cook County would be able to avoid a budget shortfall in 2016.

At the end of the day, Chicagoans, and Cook County residents in general, will have to cough up another penny for every dollar they spend in retail.



Oblongata S

Meanwhile. is TimeOut hiring? 

While cliche is cute, It would be refreshing to help pen or edit articles to exclude superfluous phrases like 'at the end of the day'. No Shade :)

Dale B

A penny on a dollar is affordable by most of us and goes somewhat unnoticed on a day-in day-out basis. The fault in the line of reasoning with having Cook County put it on the taxpayers backs IS in fact "kicking the can down the road". Should taxpayers be the ones to come to the rescue when government cannot contain costs as in the case of pension funding? Perhaps the workers benefitting from the pension should be the ones making a larger contribution to make up for the shortfall. It this was an agreement arrived at through collective bargaining than a meeting is in order to work out a different agreement. Times change, costs rise and it needs to stop being put onto the backs of the citizens to subsidize the government when they cannot meet their obligations because they have poorly managed funds distribution. Perhaps there needs to be a housecleaning of all the emplyees of the County Government and the level of accountablity rises to where working for the county loses the "government job"  tag. Working for the government is looked at as having job security, benefits, a pension and an array of other benefits that have little to do with the job. Really. Are there that many young men aspiring to drive a garage truck? Perhaps the benefits package has now become the goal and we have a case of the tail wagging the dog.

Oblongata S

@Dale B

I appreciate your position. Have you thought of a better plan?

If the city is  a cake. The cake being all benefits of living in the city. And the 'government', a system to facilitate the baking, decorating, cutting and sharing of the cake. Or you dont live in the city.

Privatization is an alternative to government. But, it is essential that a system be in place. Otherwise individuals have to build roads, plow snow, buy CTA cars, etc. 

Taxes pay for the cake. The government is elected.

Complaints about the rising cost of the cake or  small percentage changes while boldly pointing the finger at X and Y  as the leeches is the equivalent of having a piece of cake on your plate and not giving a crumb so others can get a much smaller piece of cake.

Such indignation may be better served picketing Hollywood or Coca Cola. But that's just my opinion.
Oblongata S

Hi Clayton.

Cool article. Way to stay objective!

Do your readers often wax lyrical about a penny on the dollar? I'm often incredibly amused by poorly articulated arguments fraught with spelling and punctuation mistakes. The fact that such spirited readers can find the time from mowing their lawns to read Time Out. I think it shows the true heart of the city. Don't you, Clay.

Either way. What's one percent when you have 1738!!! ...... :-)

Emj C

Our property taxes already pay and HAVE paid for the inflated pensions.  This is total bs and that you are even considering raising property taxes again.....Your chasing us out of Illinois. Time to change the whole pension system. Let them pay into social security like the rest of us the time has come. Property Taxpayers can no longer afford  to pay these HUGE PENSIONS. Just when did they get promised a full years salary til they die? Seriously. You had the funds and you lost the funds. Why is it our issue AGAIN? NOT FAIR. You spent the funds elsewhere ....should now be up to you to figure out where to get the money and not on our backs over and over again.....Some of us has had enough of MISMANAGEMENT ! Indiana is looking pretty good right now!

Randy N

They should have to go without.  We should NOT be paying to recover their pension funds!!  How on earth did this get passed? WTF?  Good move for attracting more businesses to Chicago, idiots.