Taxes, LSD Toll Among Budget-Balancing Ideas

Mayor Rahm Emanuel has a lot to prove this fall when he presents what he intends to be a balanced city budget.

Chicago's inspector general on Monday tossed the mayor a few budget-balancing suggestions. And by a few, we mean 44 spending cuts, as well as 19 ways to earn America's most taxed city more revenue, mostly by adding taxes and raising fees.

“In last year’s report, we provided data and analysis explaining that Chicago’s budget was fundamentally broken,” said Inspector General Joseph Ferguson in a statement. “One year later, the situation remains difficult."

Ferguson said imposing a 1 percent city income tax could generate $500 million in city revenue. Creating a commuter tax for nonresidents who work in the city could earn the city $300 million, he said.

Other ideas include placing tolls on Lake Shore Drive using the same open-road tolling technology as the state's I-Pass system. The toll would be based on how far drivers travel on LSD, with a full north-south trip being $5. If 200,000 vehicles paid an average $2.50, Ferguson says Chicago could earn $500,000 a day.

Other ideas: broaden the amusement tax and charge Lollapalooza that tax, increase the city portion of cigarette tax, double the ambulance fee, double the boat mooring tax, and impose a transaction tax on trades made at the Mercantile Exchange and Board of Trade.

Still others: raise water and sewer rates to the national average, eliminate free sewer service for seniors, eliminate subsidized water and sewer use for non-profit organizations, and charge non-profits a fee for city garbage pickup. 

It all means yearly earning potential of $2.3 billion, he said.

In addition, about $660 million in spending cuts were suggested across public safety, public service, finance and administration, infrastructure, city development, elections and other city departments.

Now, Ferguson said the list of options should not be construed as being endorsed by the Inspector General's Office. Rather, they're meant to be a starting point ahead of public and officials' opinions to give Emanuel's administration options, he said.

"The new Administration has candidly acknowledged the fiscal mess it inherited and has publicly committed itself to fixing it," he said. "This report is meant to support efforts to balance the budget by arming the public and City officials with context, basic data, and analysis needed to inform the tough choices ahead.”

We can only imagine how Chicagoans would respond.