Chicago looks at 63 ways to raise revenue

Following up on a report this week that says American cities are facing falling revenues, a new report for the City of Chicago looks at 63 different ways to raise revenue. According to the powers that be, some of the ideas have merit while other are “non-starters”:

In a statement Tuesday afternoon, Emanuel — who must present his budget plan next month — said several of Ferguson’s ideas are “promising” and will be given serious consideration. But the mayor said “raising property taxes, income taxes or the sales taxes is off the table. And asking drivers on Lake Shore Drive to pay a toll is also a non-starter.”…

Ferguson’s report also suggests imposing a $5 London-style congestion fee on for driving in the downtown area during rush hours. The fee would be collected in an area bounded roughly from North Avenue south to the Stevenson Expressway, and from Halsted Street east to Lake Michigan, although it extends as far west as Ashland Avenue between Lake Street and the Eisenhower Expressway…

In addition, Ferguson also suggests creating a 1 percent Chicago city income tax, much as New York City imposes, for new revenues of $500 million per year. In suggesting the tax, Ferguson’s report points out that the State of Illinois increased its income tax to 5 percent last year, but froze the amount distributed to municipal governments, thus effectively reducing the percentage of the tax that cities receive…

Ferguson also suggests eliminating the city’s more than 160 Tax Increment Financing Districts, where property tax dollars for schools, parks, and other taxing districts are frozen for at least 23 years, so that all property tax increases afterward to go into a fund to improve struggling neighborhoods. Although TIF districts generate about $500 million a year, Ferguson says $100 million in new revenues could actually be generated by eliminating them and returning all property tax revenues to the city and other taxing bodies.

It would be interesting to see look at this document to see how many of the proposed options are already in place in other cities. Additionally, how many current revenue generating schemes in Chicago are used elsewhere? Why not learn from the “best practices” (or “necessary practices”) in place elsewhere?

A number of these ideas would generate significant conversations/controversies. There a number of people who have suggested congestion pricing for big cities but actually putting this into practice and selling it to the car-hungry American public is a difficult task. The smaller options, like changing the garbage system, would probably prove more popular or at least easier to implement but they probably wouldn’t have the kind of financial impact necessary to help the city fight a $635.7 million budget shortfall.

Mayor Rahm Emanuel may have impressed people so far but can he survive this upcoming budget battle?

0 thoughts on “Chicago looks at 63 ways to raise revenue

  1. Pingback: Emanuel floats $2 congestion tax, parking lots fight back | Legally Sociable

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