Cook Co. committee approves proposed tax hikes

November 14, 2011 4:18:34 PM PST
The Cook County Finance Committee approved some proposed taxes and fees Monday.

The increases range from cigarettes and the Internet to alcohol purchases in Cook County. All are designed to help fix the county's massive budget deficit. But some say the increases may come at the expense of consumers and others.

The hike that received the most attention was the tax on wholesale alcohol. The hospitality industry was out in force trying to convince the finance committee the tax increase would hurt an already hurting industry. Commissioners argued without the additional revenue, 250 county jobs could be lost.

Larry's Bar in Harvey has been in business for years. The bad economy has been rough on the place, but owner Larry Stevens has managed to cope by laying off workers rather than raising drink prices. Stevens says that won't be the case with Cook County's proposed alcohol tax hike. Stevens says his beer prices may go up by 50 cents.

"I ate it before. I can't eat it again. This is the highest tax in the nation, twice as high as any major city," he told ABC7.

The alcohol tax would raise the tax on beer from 6 cents per gallon to 9 cents per gallon, and while Stevens may pass it on to customers, Chicago's hospitality industry expects many bars and restaurants will not, but they will cut back.

"Fewer jobs, fewer shifts, fewer hours, employees making less," said Pat Doerr, Chicago Hospitality Association.

While the alcohol industry made its case with county commissioners with a vote of 12-5, the need to fill a budget hole outweighed the concerns of bars and restaurants. Eleven million dollars will be raised with the new tax.

"Nobody likes the tax, but I don't think the president has made it so burdensome that we're going to see the impacts," said Cook County Commissioner Jeffrey Tobolski.

With her promise to roll back the sales tax hike, Cook County Board President Toni Preckwinkle and her budget team have come up with many fees and tax hikes to close a huge budget deficit.

The city is doing the same. The bipartisan Center for Tax and Budget Accountability says nickle and diming residents and businesses with fees doesn't help in the long run.

"Fees don't grow the economy over time. If it's worth $10 this year, it's worth $10 next year, that is the fee. Well unfortunately, after inflation in real terms it's actually worth a little less the next year. So over time, this over reliance on fees actually contributes significantly to structural deficits," said Ralph Martire, Center For Tax And Budget Accountability.

Besides the alcohol tax, commissioners approved an expanded tobacco tax to include snuff and loose tobacco. Residents will also have to pay more for electronic copies of certain county documents. And free parking garages at six county courthouses will now cost $4.75, although jurors, law enforcement, witnesses and early voters are exempt.

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