Wall Street Journal
March 5, 2008
Over the weekend, Chicago 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, at
10.25%. That blows past the former valedictorian, Memphis
(9.25%), as well as New Orleans (9%), Denver (8.6%), and even
New York and Los Angeles. Congratulations.
After five months of budget skirmishing, the Cook County Board
of Commissioners approved the new sales tax, to 1.75% from
.75%, by a single vote. That's on top of Illinois's 6.25%,
municipal Chicago's 1.25%, and a 1% 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:
a November 2007 "fee increase" of some $270 million,
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. 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.
Mr. Msall notes dryly that the county is "not only refusing
to tighten its belt, it's acting as if it doesn't have to
wear a belt." Then again, it'd be business as unusual
if patronage were somehow extracted from Chicago's machine
politics. Too bad for the city's actual businesses and residents.
