SECOND CITY NO MORE

March 5, 2008

Chicago recently lifted itself to the top of a tax dishonor roll: The city's cumulative sales-tax rate is now the steepest of any major metropolitan area in America, says the Wall Street Journal.

Consider:

  • At 10.25 percent, Chicago blows past the former valedictorian, Memphis (9.25 percent), as well as New Orleans (9 percent), Denver (8.6 percent), and even New York and Los Angeles.
  • After five months of budget skirmishing, the Cook County Board of Commissioners approved the new sales tax, raising it to 1.75 percent from .75 percent by a single vote.
  • That's on top of Illinois's 6.25 percent, municipal Chicago's 1.25 percent, and a 1 percent transportation sales tax for Cook and the collar counties that takes effect later this year.

This is only the latest in a succession of Chicago tax increases, says the Journal:

  • A November 2007 "fee increase" of some $270 million and a January 2008 real estate tax totaling $530 million.
  • Not to mention Illinois Governor Rod Blagojevich's $717 million in proposed tax increases statewide; supposedly the deal -- Board President Todd Stroger was pushing for an increase twice as high -- will reduce the county's $234 million deficit.

Not so coincidentally, the $426 million that the county optimistically expects to collect each year will also fund somewhere between 700 or 800 new patronage jobs, and maybe more, which were lobbied for by the public-employees unions, says the Journal.  A scathing report from a federal court monitor, released Friday, depicts rampant abuse in county hiring practices.  Laurence Msall, president of the nonpartisan Chicago Civic Federation, argues that the county already spends its $3 billion budget irresponsibly, pointing to more than $100 million in possible reforms.

Source: Editorial, "Second City No More," Wall Street Journal, March 5, 2008.

For text:

http://online.wsj.com/article/SB120467859057311951.html 

 

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