Updated: November 11, 2011 5:18PM
Mayor Rahm Emanuel has rejected raising taxes or such odd ideas as making Lake Shore Drive a toll road, but he will pursue what his political opponents refer to as the “Rahm tax.”
Emanuel disclosed Wednesday that he plans to revive a controversial idea he raised during his campaign — reducing the city’s portion of the sales tax from 1.25 percent to 1 percent but broadening the base to include an array of services not now covered.
Mayoral candidate Gery Chico had a field day with that idea. He branded it the “Rahm tax” and portrayed it as the largest sales tax increase in Chicago history.
The mayor was mum about the idea for the first four months of his administration, but it’s apparently about to make a comeback.
City Inspector General Joe Ferguson included the idea in his recent report on how the city could overcome a projected $636 million budget deficit, estimating that the broader tax could yield $450 million a year.
“I’ve talked to both the (House) Speaker and the Senate President about lowering the sales tax by expanding what is, in fact, taxed because we tax too few things and … the working families of the city carry the burden,” Emanuel said. “It’s one of the highest sales tax rates in the country.”
Earlier this week, Ferguson served up a tantalizing menu of 63 cost-cutting and revenue-raising ideas, including startling measures such as installing toll booths on Lake Shore Drive and imposing a 1 percent commuter tax on suburban residents who work in Chicago. Emanuel opposes both of those.
But he agrees on the expanded sales tax and also embraced Ferguson’s claim that Chicago could save $190 million by eliminating supervisory personnel in the fire and police departments.
The mayor also agreed with Ferguson’s claim that water and sewer rates are too low.
Ferguson claims that the city could raise $380 million per year by raising water and sewer rates to the national average. Those funds would be confined to the city’s water and sewer funds and could not be used for the corporate fund that covers day-to-day operations.