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home : news : state news free June 25, 2016

6/7/2014 4:07:00 PM
Chicago telephone tax going up by 56 percent

SPRINGFIELD, Ill. (AP) — Gov. Pat Quinn has signed legislation authorizing Chicago to increase its telephone tax by 56 percent — and possibly avert a huge property tax hike to solve a pension crisis.

The Chicago Sun-Times reported that Quinn approved the measure Friday. It could spare him and Chicago Mayor Rahm Emanuel the sticky position brought by a pre-election property tax increase of $50 million a year for five years.

Emanuel has proposed raising property taxes to help bail out financially stricken Municipal Employees and Laborers pension systems in a plan that also increases employee contributions by 29 percent and decreases benefits to erase a $20 billion shortfall. Quinn opposes a rise in property taxes.

The $2.50-a-month telephone tax — originally imposed to fund a 911 emergency-call center — was scheduled to expire July 1. The new law extends it for a year and allows the city to increase it to the level of the highest monthly surcharge in the state. That’s $3.90 in Putnam County. If the city raised its tax on cellphones and land lines to that level, it would produce an additional $50.4 million annually — the same amount as the property tax hike.

Emanuel wouldn’t say Friday whether he was amenable to the substitution.

“I appreciate the governor’s signature, which allows the city to more fully fund 911 services and will provide another tool to address our long-term fiscal obligations,” he said in a prepared statement.

Quinn, who has until Monday to act on legislation authorizing Chicago to implement a pension bailout plan, insisted that the bill not include suggestions it be funded with a property tax increase. A spokesman did not comment on whether the Democrat approved of the telephone money as a suitable replacement, saying only it was necessary to ensure uninterrupted 911 services.

Aldermen are open to the idea.

“The governor should sign the pension bill; then we need to weigh both sets of revenue and have a debate about that,” said 47th Ward Alderman Ameya Pawar. “But make no mistake. One way or another, we have to raise revenue.”

The bill is HB2453.

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