Emanuel: I won’t raise amusement tax, but cigarette tax hike possible
BY FRAN SPIELMAN Sun-Times Media September 25, 2012 4:50PM
Mayor Rahm Emanuel
Updated: October 27, 2012 6:19AM
Chicago Mayor Rahm Emanuel on Tuesday ruled out raising the city’s amusement tax but kept alive a cigarette tax hike provided the money is spent on improving children’s health.
The Chicago Sun-Times reported last week that Emanuel was considering a 1-percentage-point increase in the amusement tax to 10 percent, which would have left Chicago with the highest ticket tax in the nation.
On Tuesday, Emanuel took the amusement tax increase off the table and added it to the list of local taxes he has promised not to raise. He revealed his decision when asked whether he’s concerned that another increase in the cigarette tax would prompt even more smokers to drive across state lines to buy cigarettes at a cheaper price.
“Well, first of all I haven’t made a decision on that, but I can say this — there’ll be no property tax increase,” Emanuel said. “There’ll be no sales tax increase. There’ll be no fuel tax increase. We’re eliminating the per-employee head tax, which was a job-killer. We’re doing it ahead of schedule. And there will be no amusement tax increase. If we do consider (raising) the cigarette tax, it has to invest in children’s health.”
Mayoral spokeswoman Sarah Hamilton later said Emanuel also has ruled out a fee for garbage collection that would have mirrored the fees imposed in many suburbs.
Chicago’s per-pack cigarette tax was increased by 32 cents in 2005 and by 20 cents in 2006. That raised the city’s tax to 68 cents per pack. At $4.67 a pack, Chicago has the nation’s second-highest combined state and local tax rate on cigarettes. New York City is at $5.85 a pack.
Chicago’s two-tiered amusement tax was last increased in 2009 — from 4 to 5 percent for mid-sized venues and from 8 to 9 percent for large sporting events. The lower tax rate applies to live theatrical, musical and cultural performances in venues with more than 750 seats. Smaller theaters are exempt.
Until an ill-timed controversy over the conservative politics of Joe Ricketts, patriarch of the billionaire family that owns the Cubs, team owner Tom Ricketts was still hoping to use 35 years’ worth of amusement tax growth to help finance a $300 million renovation of Wrigley Field.
Any increase in the amusement tax would have increased the city’s $88 million-a-year take and reduced the number of years the Cubs would need to siphon growth to renovate the ballpark. But it would also have encountered strong opposition from live theaters, movie theaters and from Chicago’s five professional sports franchises.
Emanuel’s administration announced last week that a 2013 budget shortfall pegged at $369 million just two months ago has been reduced to $298 million, thanks to rising revenue and greater savings from the mayor’s “wellness” plan to curb rising health care costs. That allowed Emanuel to move up by six months his plan to eliminate the head tax.
The mayor is also planning “targeted layoffs” and more “managed competition” between city employees and private contractors, including vehicle booting.
Police and fire cuts that could be substantial must await the outcome of contract talks with those unions. That will force Emanuel to include a placeholder pay raise for police officers, firefighters and paramedics that may or may not be big enough.