Taxes important issue in race for mayor

February 15, 2011 3:23:31 PM PST
Election Day is Tuesday, February 22. One of key issues in the race for Chicago mayor is taxes.

Whether it's getting rid of an existing tax, or adding a new one, the next mayor faces a very big budget challenge.

Historically, the tax issue has cost elections. It tends to be political suicide for any candidate to say he or she will raise taxes.

None of the six mayoral candidates have plans to do that as a source of revenue. However, one candidate wants to add a tax to pay for a reduction of another, and many say Rahm Emanuel's numbers don't add up.

"It is completely harmful to look at new taxes when their backs are so stressed from what they are carrying," said candidate Gery Chico.

But Emanuel is looking at a new tax. As part of a tax-cut proposal that includes reducing the sales tax by 20 percent, Emanuel wants to tax certain luxury services.

"Limos, private jets, exclusive clubs," Emanuel said.

It is a tax that Michael Pagano, the dean of UIC's urban planning department, calls a fair one, especially for lower income people who do not use services as much as higher income people.

"It's not generating anymore revenue," said Pagano, "but it is spreading the base of the sales tax to include a much larger portion of what we as consumers actually buy."

While they don't agree on a service tax, Emanuel and Chico support eliminating the head tax; so do mayoral hopefuls Carol Moseley Braun and William "Dock" Walls.

The head tax is a small tax on employers with over 50 employees. Companies are charged $4 per employee a month, totaling $48 a year, $20 million for the city budget.

"Repeal the head tax and the answer is almost every service provided by the city is paid for by a resident of the city and not necessarily a consumer of the services," said Pagano.

Candidates Patricia Van Pelt-Watkins and Miguel del Valle support leaving the head tax alone.

"Sure, politically speaking it sounds like, 'Oh, we are going to help business,' but let's not kid the voters," said del Valle.

And while none of the six candidates have plans to raise property taxes, all support more transparency for how property tax money is spent in tax increment finance districts, known as TIFs. TIFs are a funding tool to promote economic development.

Braun is calling for a moratorium on TIFs.

"We don't know where the money is going, so we need to audit that," said Braun.

Chico supports placing a one-year moratorium on new TIF districts while the TIF program is overhauled.

Miguel del Valle says TIF surplus money should be used to balance the city's budget. Emanuel says he would appoint a panel of economic experts to study the best use of TIF funds.

All six candidates agree TIF money should be used for its original intent: to help blighted areas.

The candidates will debate live Thursday at 7 p.m at the oriental Theatre. You can watch it live on ABC7 and