Emanuel Hints At Increase In Amusement Tax On Cable TV

By Chuck Sudo in News on Oct 22, 2013 2:50PM

A hike in the cigarette tax isn’t the only option Mayor Rahm Emanuel is weighing to help close the city’s $339 million budget deficit and raise revenue for programs. Emanuel is also considering a 2 percent increase in the amusement tax added to cable television bills.

The city’s two-tiered amusement tax saw previous 1 percent hikes in 2005 and 2009 and currently stands at 5 percent for mid-sized venues (live theatrical, musical and cultural performances in venues with more than 750 seats) and 9 percent for large sporting events. Cable customers were granted a 5 percent exemption and paid only 4 percent. The Emanuel proposal will cut the exemption to 3 percent, meaning cable customers would pay a 6 percent amusement tax.

It isn’t known the tax is levied on the cable companies, who then pass it along to customers, although the Emanuel administration suggested the companies can eat the tax. Since cable companies have routinely hiked their rates like clockwork an average of 3 to 4 percent every year, the chances of that happening are next to none.

Another issue with the proposal: City Hall isn’t sure how much the tax hike would add to individual cable bills, although they say it shouldn’t be more than a few dollars a month at most. The revenue the hike is expected to generate would be earmarked to help reduce the city’s budget deficit and fund Chicago Park District’s “Nights Out in the Park” program.

The amusement tax hike could have been worse. Emanuel considered an across-the-board hike before he faced stiff opposition from Chicago’s pro sports franchises. Blackhawks owner Rocky Wirtz called for a freeze in the amusement tax.

"It's important to either freeze (the tax) or reduce it to incentivize teams to reinvest, instead of trying to kill the goose that lays the golden egg," Mr. Wirtz said in an interview after speaking to the Civic Committee of the Commercial Club of Chicago, a nonprofit group of local executives.

Another problem he has with the tax: He's skeptical of how the city is using the money.

"There's nothing that I see that the amusement tax is put back into that helps any of the teams," he said, adding that the United Center paid $18.5 million in amusement taxes in 2012. "It just suddenly comes right out of the fans' pockets, and it just goes to a large deficit that the city has. I understand the city has a large deficit, but they've taxed us as much as they can tax us.”

Emanuel is also weighing increasing zoning permit fees on large construction projects. We’ll know everything the mayor has planned to fill the deficit when he reveals his 2014 budget Wednesday.