Rahm Emanuel plans to revive push to broaden sales tax base
BY FRAN SPIELMAN City Hall Reporter email@example.com September 28, 2011 11:52AM
Mayor Rahm Emanuel visits with Lead Teacher Claudia Cattage and Alexis Sardin before announcing an overhaul of the City’s early childhood education programs, in an effort to serve the most at-risk children in high –quality programs. At the Educare Early Childhood Center 5044 S. Wabash September 28, 2011 I Brian Jackson /Sun-Times
Updated: November 11, 2011 4:51PM
Mayor Rahm Emanuel has put the quick kibosh on installing toll booths on Lake Shore Drive and raising income, property or sales taxes, but that apparently does not apply to what his political opponents refer to as the “Rahm tax.”
Emanuel disclosed Wednesday that he plans to revive the most 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.
Chico ran television commercials about it and staged a series of news conferences at bowling alleys and barber shops to drive home his claim that Emanuel would be asking working families to shell out more money.
The mayor was mum about the idea for the first four months of his administration. But the proposal is apparently about to make a comeback.
Inspector General Joe Ferguson included the idea in his $3 billion roadmap to financial stability and estimated that it could yield $450 million a year.
“I have to go to Springfield to do that,” Emanuel said at an unrelated news conference Wednesday. “ I’ve talked to both the 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 and it’s one of the highest sales tax rates in the country.”
He added: “I wanted to do exactly what I think is the right thing: close loopholes, lower the rate, make sure other people are carrying the burden — not the working families of Chicago.”
Earlier this week, Ferguson served up a tantalizing, menu of 63 cost-cutting and revenue-raising ideas.
Referring to some of the inspector general’s most controversial ideas, the mayor said, “Lake Shore Drive is a non-starter. I’m not taxing commuters on Lake Shore Drive. I am against an income tax for Chicago. I am against increasing property taxes. I am for lowering the sales tax and I, in fact, will have a tax cut that I committed to in the campaign in my budget.”
Emanuel is also opposed to an income tax on suburbanites who work in the city, an idea some aldermen have embraced.
Broadening the sales tax is not the only point on which Emanuel and Ferguson agree.
The mayor also embraced the inspector general’s claim that Chicago could save $190 million by eliminating supervisory personnel, 707 of them in the Fire Department, where there are 3.58 supervisors for every rank-and-file employee and 309 in the Police Department, where the current ratio is 8 to 1.
“I don’t think I was in office 24 hours and I started going after supervisors and middle-management — starting in my office. When it came to the $75 million I eliminated from my predecessor’s budget, it was 200 senior management and middle-management positions that I didn’t fill,” he said.
“For too long, the bureaucracy in this city has been protected. It’s gotten fat, and I can guarantee you one thing as it comes to my budget: I’m gonna make sure that the bureaucracy is not where we put our resources. It’s in the classrooms. It’s in the early childhood centers. It’s on the police beat that they’ll be walking.”
The mayor also agreed with Ferguson’s claim that water and sewer rates are too low.
Ferguson claims the city could raise $380 million-a-year, simply 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 which is used to fund day-to-day operations.
“He’s not wrong about that fact. Water rates in the city of Chicago are below the national average. They’re below other Great Lakes cities,” the mayor said.
Emanuel noted that three of four impoverished suburbs that collectively owe the city $15 million in overdue water bills have now agreed to a payment plan. And he reiterated his campaign promise to turn off the free water spigot to hospitals and non-profits. That’s a move the IG claims could yield $15.2 million annually.