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Chicago’s 2018 Budget To Include Tax Hike For 911 And Fee Increase For Uber And Lyft

The “powers” that be in the city’s Chicago are not going to be truly satisfied until they’ve drained the last dime to the last dime from the people of Chicago.  Interesting with the budget talks nothing has come up about politicians staking a pay cut or cutting the fat back on wasteful spending.   It’s no wonder people are not only ,ovine from the city it from the state as well.  It’s just too costly to live in Chicago.

Read more about the proposed budget as reported by the Chicago Tribune:

Photo Credit: Chicago City Hall Rich Hein/Sun-Times

$1.10-a-month increase in the 911 phone tax will help pay for the 2018 spending plan Mayor Rahm Emanuel will present Wednesday, and a 15-cent fee hike for Uber and Lyft rides will be used to help the CTA fund system upgrades, city officials said Tuesday.

A 28 percent increase in the 911 tax would pump about $30 million into City Hall’s coffers. That money must be spent on the city 911 phone system, which the city is upgrading. But the move will free up about $19 million to be spent on other day-to-day city costs, Budget Director Samantha Fields said.

The current 52 cent fee on all trips arranged with ride-hailing apps would rise another 5 cents in 2019 after the 29 percent increase next year, Fields said. That’s expected to provide an extra $16 million for the CTA in the first year and $5 million more in the second, she said.

The Emanuel administration maintains that the ride-hailing industry has drained $40 million from city and other local government coffers, in part by shifting some commuters away from the CTA.

Mayoral spokesman Adam Collins also said the the Uber fee increase was negotiated with “the ride-share industry.” Emanuel’s brother, Hollywood talent agency CEO Ari Emanuel, is an investor in Uber.

Things could have been worse for the ride-share companies. Ald. Anthony Beale, 9th, who chairs the City Council Transportation Committee, was calling for a 50-cent per-ride increase. Uber spokeswoman Molly Spaeth released a statement Tuesday afternoon in response to the Emanuel budget plan, saying the company believes “that the future of urban transportation will be a mix of public transit and ridesharing, and that by encouraging residents to use a variety of options, we can all ride together to build a better Chicago.”

The mayor also wants to increase the amusement tax to 9 percent from 5 percent on concerts, comedy shows and plays in venues with more than 1,500 seats to raise $15.8 million a year. Ticket buyers at venues with between 750 and 1,500 seats, who are now paying the 5 percent tax, wouldn’t have to anymore.

That’s an increase the owners of the United Center don’t like, according to a statement posted on their website Tuesday afternoon that criticized the move on the grounds it would hit music fans and hurt the city’s overall economy as acts opt to instead perform in the suburbs. “As the shows leave, so will the dollars that flow through restaurants, cabs and hotels on any given show night,” the statement reads in part. “Despite what our political leaders believe, the losses will far surpass any gains a tax increase is intended to garner.”

$1.10-a-month increase in the 911 phone tax will help pay for the 2018 spending plan Mayor Rahm Emanuel will present Wednesday, and a 15-cent fee hike for Uber and Lyft rides will be used to help the CTA fund system upgrades, city officials said Tuesday.

A 28 percent increase in the 911 tax would pump about $30 million into City Hall’s coffers. That money must be spent on the city 911 phone system, which the city is upgrading. But the move will free up about $19 million to be spent on other day-to-day city costs, Budget Director Samantha Fields said.

The current 52 cent fee on all trips arranged with ride-hailing apps would rise another 5 cents in 2019 after the 29 percent increase next year, Fields said. That’s expected to provide an extra $16 million for the CTA in the first year and $5 million more in the second, she said.

The Emanuel administration maintains that the ride-hailing industry has drained $40 million from city and other local government coffers, in part by shifting some commuters away from the CTA.

Mayoral spokesman Adam Collins also said the the Uber fee increase was negotiated with “the ride-share industry.” Emanuel’s brother, Hollywood talent agency CEO Ari Emanuel, is an investor in Uber.

Things could have been worse for the ride-share companies. Ald. Anthony Beale, 9th, who chairs the City Council Transportation Committee, was calling for a 50-cent per-ride increase. Uber spokeswoman Molly Spaeth released a statement Tuesday afternoon in response to the Emanuel budget plan, saying the company believes “that the future of urban transportation will be a mix of public transit and ridesharing, and that by encouraging residents to use a variety of options, we can all ride together to build a better Chicago.

The mayor also wants to increase the amusement tax to 9 percent from 5 percent on concerts, comedy shows and plays in venues with more than 1,500 seats to raise $15.8 million a year. Ticket buyers at venues with between 750 and 1,500 seats, who are now paying the 5 percent tax, wouldn’t have to anymore.

That’s an increase the owners of the United Center don’t like, according to a statement posted on their website Tuesday afternoon that criticized the move on the grounds it would hit music fans and hurt the city’s overall economy as acts opt to instead perform in the suburbs. “As the shows leave, so will the dollars that flow through restaurants, cabs and hotels on any given show night,” the statement reads in part. “Despite what our political leaders believe, the losses will far surpass any gains a tax increase is intended to garner.”

Added revenue from the 911 increase and amusement tax change would help close a total budget gap that stands at about $288 million, after Emanuel adds spending to hire new cops, implement Police Department reforms and pay Chicago Public Schools building security costs.

Also helping close that hole is an expected $94 million in lower debt payments the city expects to achieve through a new bond restructuring approved this year by state government, city Chief Financial Officer Carole Brown said.

The mayor also plans to declare a $166.9 million surplus in tax increment finance district money. Out of that, the city will dedicate $66 million toward its commitment to pay $80 million in CPS building security costs, Fields said.

CPS gets nearly half of all TIF surplus money. The city keeps nearly one-fifth, with the rest going to other local governments like Cook County, the Chicago Park District and the Metropolitan Water Reclamation District.

The debt savings, TIF surplus and increased 911 and amusement taxes close about $215 million of the budget hole. Cost cutting, better debt collection and expected growth in some revenue areas plug the rest.

Emanuel’s total 2018 spending plan comes to $8.6 billion, before grant funding is figured in. That’s an increase of about $289 million over what the city expects to end up spending this year. Most of the extra spending would go to increased pension fund contributions, while day-to-day city spending is expected to go up about $70 million.

The mayor on Tuesday said the ride-hailing fee increase was a way to boost spending on public transportation, which he deems more efficient in Chicago than other cities. “People take our mass transit system, something they’re not capable of doing right now in New York, D.C. and other areas because their mass transit system’s broken,” Emanuel said.

The mayor will deliver his budget address on Wednesday at 10 a.m. The budget then goes to aldermen for consideration, and typically some adjustments are made before it’s approved in late November.

Ald. Patrick O’Connor, 40th, said he expected the increase in the 911 tax to be an easier sell to city residents than the Cook County soda pop tax, which the County Board repealed last week amid a backlash from residents and retailers, fueled by a multimillion-dollar campaign funded by the American Beverage Association.

“You have a state law that requires us to update our phone system by 2020,” O’Connor said. “They’ve identified a funding source for us.”

Compared with the pop tax that was primarily designed to fill a county budget hole, “it’s much more transparent to have a tax that is directly related to the update of the system,” he added. “I think this is a much more straightforward way of presenting it to the people who would be paying it. … I don’t think that’s something people will have a problem with.”

The 911 fee increase was authorized this year by the state and is a component of Emanuel’s budget even though his top spokesman said this year that the 2018 budget would not include “a citywide tax increase.” For a family with three telephone lines, though, the new 911 tax amounts to an additional $39.60 in taxes to the city next year. It comes after Emanuel and the City Council in 2014 raised that fee by $1.40 per month to the current $3.90, money he used to help shore up the city’s worker pension fund.

On top of the 911 fee increase, Chicago property owners will be hit with a previously approved $63 million city property tax increase next year, the fourth and final consecutive annual hike in that levy approved in 2015 to dramatically increase annual contributions to the pension funds for police officers and firefighters. That doesn’t include a total CPS tax increase of $224.5 million.

Taken together, those hikes could boost local property tax bills by more than $230, but a newly increased homeowners exemption approved in August by state lawmakers at Emanuel’s request would lower the bill on a $250,000 home by about $148 next year, city financial spokeswoman Molly Poppe said.

Some aldermen were concerned about the city setting the precedent of helping CPS and the CTA pay its bills, but Brown defended the move. She noted Emanuel is considered the CEO of the entire city. “I think that we recognize that city residents want certainty with their schools (and) they want safe, clean reliable transit,” she said. “And so the mayor understands how important is to attract residents and corporations to our city that we have those things.”

Source: Chicago Tribune

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