Tag: revenue

First We Get the Money…:$12 Billion to Fund a Just Chicago

Mary Pat Campbell

Link: https://www.scribd.com/document/645874607/First-We-Get-the-Money-FINAL-v3#

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Reinstitute the big business head tax: Mayor Johnson should reinstitute the big business head tax to make large corporations pay what they owe for benefiting from the city’s public infrastructure. The head tax existed previously in Chicago, until Mayor Rahm Emanuel eliminated it as a handout to corporations.3 Reinstating the head tax at a level of $33 per employee per year would generate $106 million a year in new revenue.4

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Institute a city income tax on high earners: Mayor Johnson should lobby Springfield to give the city the authority to institute a municipal income tax on high earners who live or work in the city. A 3.5% tax on household income above $100,000 would bring in an estimated $2.1 billion a year in new revenue, of which $1.6 billion would be from high-earning Chicagoans and $490 million from high-earning commuters.16 By way of comparison, New York and Philadelphia both have municipal income taxes with top rates above 3.7%.17 By exempting the first $100,000 of income from the tax, the city could ensure the tax is progressive without a change in the state constitution.

  Institute a luxury apartment vacancy fee: Mayor Johnson should work withstate officials to implement a vacancy fee on large, luxury apartment buildings with units that sit vacant for more than 12 months at a time. Landlords who own more than 20 units and are asking for a monthly rental price that exceeds the 75th percentile in the city (based on the number of bedrooms) must pay a fee equal to the median rental price in the city on each unit that sits vacant for more than 12 consecutive months, if more than three units in the building sit vacant for more than 12 consecutive months. This would encourage luxury developers to charge more affordable rents that can maintain higher occupancy rates. This policy is designed to encourage landlords to lower rents to avoid having to pay the fee; thus, if it works as intended, we hope that it would eventually not produce any revenue for the city but that it would increase affordable housing options.

Author(s): Saqib Bhatti, Gabriela Noa Betancourt

Publication Date: May 2023

Publication Site: Scribd

Can States and Cities Dig Themselves Out?

Mary Pat Campbell

Link: https://www.city-journal.org/multimedia/can-states-and-cities-dig-themselves-out

Excerpt:

David Schleicher: Yeah, absolutely. There’s an old joke that says, “The federal government is an insurance company with an army.” But anything you actually touch, can physically touch, any infrastructure of any sort, or services you consume and need to care about in one way or another are almost all directly provided by the state and local governments. They’re often funded sometimes with money from the federal government, but they are directly private and partially funded by state and local governments. The fiscal health of state and local governments is extremely important to, say, the question of state capacity in America.

Allison Schrager: It seems like we don’t talk about it until you’re Illinois or if you’re a municipality, Detroit, but it seems like we’ve been talking about this big shoe to drop on state municipal bankruptcies for a while and it doesn’t come, but that doesn’t mean we should be complacent.

David Schleicher: Yeah, absolutely. Two things. One is that it definitely would’ve come in the last couple of years had the federal government not dropped a ton of money on state and local governments. The pandemic created huge fiscal problems for a number of jurisdictions. The federal government responded by providing a huge amount of aid. The effect of that is that has had benefits and costs, which I’m sure we’ll talk about, but you can’t just look through the defaults or absence of defaults, to ask the question of “Are states and cities in fiscal trouble?” State and fiscal budgets are very procyclical. We end up cutting really important things during recessions and spending too much during non-recessions. Then we have the question of federal bailouts.

Allison Schrager: Yeah, it’s a very complicated issue, so what to do about this. But you have a very sort of organized, clean way to think about it. You describe it as this trilemma.

David Schleicher: Yeah. When a state or city faces a fiscal problem, fiscal crisis, take New York City in the 1970s or Detroit, or Puerto Rico or whatever it is. We’ve had, over the course of American history from Hamilton’s assumption of state debts, we’ve had a series of state and local fiscal crises. We have a lot of governments and some of them are going to have crises. The question is, what should the federal government do? Well, the federal government has three things it would like to achieve, which are, it doesn’t want to have too severe cuts during recessions, because that creates even bigger recessions. It doesn’t want to encourage state and local governments to think that the federal government will always stand behind them, a problem we call moral hazard. It wants federal state and local governments to be able to continue to borrow because state and local governments need to borrow to build infrastructure.

Author(s): David N. Schleicher, Allison Schrager

Publication Date: 2 Jun 2023

Publication Site: City Journal

ILLINOIS FORWARD 2023: ONLY PENSION, BUDGET REFORM CAN SAVE TAXPAYERS WHEN FEDERAL AID ENDS

Mary Pat Campbell

Link:https://www.illinoispolicy.org/reports/illinois-forward-2023-only-pension-budget-reform-can-save-taxpayers-when-federal-aid-ends/

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Excerpt:

Spending in the state budget actually has increased – significantly – under Gov. J.B. Pritzker relative to baseline expectations in the state budget. Even if lawmakers and the governor make no further increases to spending in the fiscal year 2023 budget, which is unlikely given that Pritzker has proposed spending increases in each February budget address of his term, then total spending during Pritzker’s first term will be up nearly $5 billion, or 3% higher than when he took office.

Author(s): Adam Schuster

Publication Date: accessed 2 Feb 2022

Publication Site: Illinois Policy Institute