Preckwinkle plan passes easily after compromises
Cook County Board President Toni Preckwinkle, seen here last month, easily got her budget approved today. (E. Jason Wambsgans / October 18, 2012)
In addition to the $1-per-pack increase on a pack of smokes and a new $25 per-gun tax on firearm purchases, the board also enacted a 1.25 percent use tax on large out-of-county purchases, with an exemption on the first $3,500 spent. There’s also a $1,000-per-year tax on slot machines and a $200-per-year tax on video gambling terminals.
The cigarette tax increases March 1, while the use tax and gun tax are effective April 1. The gambling machine tax won’t be implemented until June 1, giving the Illinois General Assembly time to offer up an alternative way to share gambling revenue with the county if it so chooses.
All those taxes, and some modest fee increases for permits and morgue documents, is expected to raise $41.7 million.
“I think the revenue increases are small, they’re targeted and largely they’re avoidable, if you so choose, to residents of the county,” said Commissioner Bridget Gainer, D-Chicago, as she voted in favor of the document.
Preckwinkle’s budget also kills off the last quarter-cent of the penny-on-the-dollar sales tax increase enacted under Preckwinkle’s predecessor, Todd Stroger, which will inflict an $86 million hit on the county’s bottom line. The county portion of the sales tax will drop to .75 percent on Jan. 1.
The only “no” vote came from Commissioner William Beavers, D-Chicago, who was Stroger’s floor leader and often has butted heads with Preckwinkle and Finance Committee Chairman John Daley, D-Chicago. All four Republicans on the 17-member board voted in favor of the budget, after lauding Preckwinkle’s bipartisan approach and cuts in spending.
Preckwinkle has defended the new cigarette and gun taxes by saying they will defray the costs to the county’s criminal justice and public health systems — which account for nearly three fourths of annual county spending — caused by smoking and guns by people who resell them to criminals for profit. The higher cigarette tax also could deter young people from starting the harmful habit, she said.
The use tax, which is expected to mostly affect businesses, is designed to encourage in-county purchases, Preckwinkle said.
The biggest chunk of new revenue will come from the cigarette tax, which follows a recent state increase of $1 per pack that went into effect June 24. County officials expect its increase to raise $25.6 million next year, saying they have accounted for folks who will leave the county to buy cigarettes or quit smoking.
Some commissioners, though, have questioned the long-term reliability of the cigarette tax increase, which will boost the overall taxes on a pack of smokes in Chicago to $6.67 — making it just 19 cents shy of New York City’s nation-leading $6.86.
When the county last raised the cigarette tax by $1 per pack in 2006, collections initially shot up by $46.5 million, county records show. But three years later, in 2009, the county collected $20.4 million less than it had in 2005.
The 1.25 percent “buy-local tax” on out-of-county purchases, expected to bring in $13.8 million, is on shaky legal ground, according to a Taxpayers’ Federation of Illinois analysis. Preckwinkle’s aides said they believe the law will withstand any legal challenge.
Preckwinkle’s budget was aided when the federal government recently granted the county Health and Hospitals System a waiver that will allow the early enrollment of 115,000 more patients in Medicaid that otherwise wouldn’t pay for county health care. That is expected to net $99 million for the public health system.
One initiative included in the budget is a $2 million fund to make grants to groups that combat gun violence and set up a gun court.
Another is setting aside $5 million to upgrade roads and sewers in unincorporated areas to make them more attractive for annexation to neighboring suburbs. Preckwinkle aims to eliminate unincorporated areas, which put stress on the county’s budget, within the next decade.
She’s also continuing efforts to reduce the population at the Juvenile Temporary Detention Center, where it costs $600 a day to house and educate young people accused of crimes, by finding alternatives to get them treatment and guidance.
And she’s making more efforts to reduce the jail population, where it costs $143 a day to detain inmates, by taking steps to get more people accused of non-violent crimes released on bond while they await trial.