Daily Egyptian

An extra $1.10 per month in phone fees in Emanuel budget

Mayor+Rahm+Emanuel.+%28Antonio+Perez%2FChicago+Tribune%2FTNS%29
Mayor Rahm Emanuel. (Antonio Perez/Chicago Tribune/TNS)

Mayor Rahm Emanuel. (Antonio Perez/Chicago Tribune/TNS)

Mayor Rahm Emanuel. (Antonio Perez/Chicago Tribune/TNS)

Another increase in the 911 phone tax will help pay for Mayor Rahm Emanuel’s 2018 spending plan, which also will include an increase in the fee for Uber and Lyft rides to increase CTA funding, City Hall sources said Tuesday.

A $1.10-a-month increase in the 911 tax would pump about $40 million into Chicago’s coffers. With all the money dedicated to the city’s 911 phone system, money could be freed up elsewhere in the budget to help cover increased contributions to the pension fund for city laborers.

That will help close a total budget gap of about $288 million, after adding funding to hire new cops, implement Police Department reforms and pay Chicago Public Schools building security costs. Also helping close that hole is lower debt payments the city expects to achieve through a new bond restructuring approved this year by state government.

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Emanuel will deliver his budget proposal Wednesday. Ald. Patrick O’Connor, 40th, was briefed by city financial officials Tuesday morning and said he expected the increase in the 911 tax to be an easier sell to city residents than the Cook County soda pop tax, which the County Board repealed last week amid a backlash from residents and retailers, fueled by a multi-million-dollar campaign funded by the American Beverage Association.

“You have a state law that requires us to update our phone system by 2020,” O’Connor said. “They’ve identified a funding source for us.”

Compared with the pop tax that was primarily designed to fill a county budget hole, “it’s much more transparent to have a tax that is directly related to the update of the system,” he added. “I think this is a much more straightforward way of presenting it to the people who would be paying it. … I don’t think that’s something people will have a problem with.”

The 911 fee increase was authorized this year by the state and is a component of Emanuel’s budget even though his top spokesman said this year that the 2018 budget would not include “a citywide tax increase.”

For a family with three telephone lines, though, the new 911 tax amounts to an additional $39.60 in taxes to the city next year. It comes after Emanuel and the City Council in 2014 raised that fee by $1.40 per month to the current $3.90, money he used to help shore up the city’s worker pension fund.

The exact amount of the increased fee on trips provided through ride-hailing apps would not be as large as one proposed by Ald. Anthony Beale, 9th, the pro-taxi industry chairman of the City Council Transportation Committee, a City Hall source said. Beale has proposed increasing the current 52 cent city fee on all Uber and Lyft rides to $1.

The city maintains that the ride-hailing industry has drained $40 million from city and other local government coffers, in part by shifting some commuters away from the CTA and to ride-hailing services.

On top of the 911 fee increase, Chicago property owners will be hit with a previously approved $53 million city property tax increase next year, the third of four consecutive annual hikes in that levy to dramatically increase annual contributions to the pension funds for police officers and firefighters. That doesn’t include a total CPS tax increase of $224.5 million.

Taken together, those hikes could boost local property tax bills by hundreds of dollars, but the effect will be mitigated for owners of less expensive homes by a higher homeowner exemption approved by state lawmakers at Emanuel’s request.

The mayor also plans to declare a large surplus in tax increment finance district money. Out of that, the city will dedicate $66 million toward its commitment to pay $80 million in CPS building security costs, O’Connor said.

CPS gets nearly half of all TIF surplus money. The city keeps about one-fifth, with the rest going to other local governments like Cook County, the Park District and the Metropolitan Water Reclamation District.

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(c)2017 the Chicago Tribune

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