County Budget needs Weight Watchers
By Ed Lowe
Senior Writer
To start off the New Year, Cook County Board President John Stroger has floated a trial balloon. If we’re lucky, the idea of increasing taxes on the hospitality industry in Chicago will be dead before the hot air escapes from the attempt to once more pass off the inefficiency, greed and mismanagement of the County on the visitors who come to Chicago for business or pleasure.
To give our readers some idea of how important this industry is to us all, we contacted the Chicago Convention and Tourism Bureau (CCTB) to get some up-to-date statistics on how much those conventions, trade shows and recreational visitors add to the quality of life here.
According to CCTB statistics, there is the staggering sum of $8.7 billion dollars added annually by the various elements that make up the so-called hospitality business in Chicago. This industry also adds some $500 million in tax revenues to the coffers of the City, County and State. Not a bad haul. But now with the ill-advised proposal, there would be additional revenues made available to the overspending bureaucracy. This industry includes all the restaurant and hotel workers, the cab and limo drivers, the catering companies, the airport personnel and the people who work at places like Navy Pier, McCormick Place and the other tourist attractions scattered throughout the city.
The specifics are easy to understand. During the week of Nov. 21, 2004, a normal weekend without heavy convention business in town, the CCTB has calculated that average hotel room rate was $126.86. The current tax rate on this amount would add $18.90 per night to the bill. After the recent increases that the Mayor has added to balance his city budget, the tax would increase to $19.54 and if the County Board should increase its share of the revenues, it would skyrocket to $22.07.
But that was for reasonable hotel rates. When a major convention hits town, the hotels boost their room rates and when the Radiological Society of North America hit town in late November, the average rate went up to $205.10. The three tax rates would go from $30.56—the current rate—to $31.59 after the Daley increase on July 1 to $35.69 should the County decide to dip their feet into the barrel. The same kind of numbers apply to restaurant charges. Typically, a visitor drops something like $55.00 a day on food with taxes adding another $5.36 to his bill. That figure would increase to $5.64 under the Stroger proposal.
The easiest people to tax are those who don’t have a vote for the people who impose the tax. That’s true of the visitors who come to Chicago—except when they decide it’s too expensive to come to town. The patsies who pay the taxes aren’t heard from again. They don’t protest, and the politicians know that. It’s not a so-called "sin" tax, instead it’s a tax on absentees who pay when they come to town to play. When the tax becomes oppressive, they simply won’t show up—and then it will be too late.
So, you might ask, what does all this have to do with someone on the North Side who takes the el to work in the morning and eats out, maybe, once a week? The fact is that 126,000 jobs in Chicago are directly related to the hospitality industry and the business has added 12,000 more jobs in 2002 and 2003. That makes a significant increase.
Now, as to the other side of the issue, a number of County Commissioners and other public officials have publicly stated their opposition to this scheme. Good for them. They have also pointed out that by increasing the taxes on this element of the local economy, we are in the process of killing the goose that’s been laying the golden egg for Chicago business.
We’ve got lots of problems here. We have to compete with cities like Las Vegas and Orlando which offer tourism attractions Chicago can’t even begin to compete with. Adding gambling to the mix in Chicago won’t change that because, as anyone who has visited Las Vegas or Orlando knows, there is a lot more to those towns than slot machines and crap tables. Chicago has problems with union featherbedding at the Convention Centers where it’s necessary to hire a union electrician at a fantastic hourly amount to plug a phone jack into a module, or to install an electric spotlight. And don’t even think about setting up your own booth at a trade show because, unless you’re a really small business operator, you have to work through the Unions and the Convention organizers—and they don’t work for nothing. Chicago’s wake-up call came when the national hardware show pulled out of Chicago last year. The CCTB is struggling to hold on to other large revenue generating trade shows, but they need all the help they can get from the City, County and State.
Making it tougher and more expensive to come to Chicago won’t help them at all. We also need to show off the newest elements of the City—for example, Millennium Park, which is a tourism attraction. But who’s coming to town to see The Bean when they get soaked 17.4 percent extra for the privilege of sleeping overnight in town?
So, the County needs more money. They’re like all of us except that we don’t have the right to simply raise our income level. When things get tough for most of us, we have to tighten our belts and spend a little less until we get our income and expenses in balance. The County doesn’t know anything about belt tightening. There is so much waste in the budget that it would take a team of auditors months to eliminate the duplication and overspending that’s taking place. And if the waste gets tossed into the garbage, the waist gets smaller and the budgetary belt fits. Let the County go on a diet—it’s part of a national fad anyway. |
