No one wants to be the bad guy.
Voters don’t like taxes and customers don’t like high prices, but as politicians and companies try to keep everyone happy, how are they to manage rising costs in difficult economic times?
Local governments and businesses are increasingly turning to fees to boost revenue. Hidden, add-on charges are creeping into everything from municipal budgets to telecom bills to financial statements.
An extra $1 here and $3 there may not seem like much, but hit the “total” button and it’s clear these little charges add up to big money.
And, of course, fees are nothing new to Chicago residents, but they seem to be on the rise everywhere in the city.
Last year, the Park District hiked the prices on using park facilities, in some cases dramatically, meanwhile cutting the money it gives to museums on park property. Result? Museum admission prices increase–just one example of tight budgets leading to extra charges.
On a national scale, states hauled in an extra $2.6 billion in revenues this year by raising several hundred fees, according to the National Conference of State Legislatures.
Under Mayor Daley’s plan, fee hikes are designed to help increase revenue without making major tax adjustments.
“Any property tax increase was an absolute last resort,” said Lisa Schrader, spokeswoman for the Budget and Management Department.
Aside from the SUV city sticker fee increase ($90 for cars weighing more than 4,500 pounds), other measures in the $4.8 billion budget address parking.
Street meter hours would extend into the evening (not overnight) and Sundays in certain commercial areas during high traffic periods. The change would yield an estimated $3 million a year. Also, parking ticket fines would spike, in some cases increasing up to four times.
Although community members commended Daley for avoiding property taxes and applying targeted fees such as the increased SUV city sticker price, some said there might be better ways to cover costs.
“I urge the mayor to look at ways to be more effective and efficient with revenues that are already coming in,” said Diane Brown, executive director of Illinois Public Interest Research Group.
Daley expects to raise another $8 million through a proposed .25-percent restaurant tax on prepared food purchases. The measure replaces the similar “litter” tax on carry-out food, which was barred by a state court last year as too vague.
The tax is on top of the current sales tax, which ranges from 8.75 to 9.75 percent across the city.
Chicago restaurant owners complained that the additional tax would hurt businesses that already are preparing to face an increase in the minimum wage and a possible smoking ban.
Aldermen discussed the restaurant tax last week and raised few objections, according to Schrader.
