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Taxes, taxes and revenue

Tuesday, May 27, 2014

* I told subscribers about this 11th Hour move last week

A proposed hike in Chicago’s tax on cellphones has surfaced in Springfield — one of a series of last-minute developments as lawmakers rush to pass a budget and take up other business before their scheduled adjournment May 31.

The phone tax, which would apply only to cellphones and not land lines, is being pushed in the Illinois General Assembly by lobbyists for Mayor Rahm Emanuel and reportedly would take the levy from $2.50 a month now to $3.90.

A spokeswoman for the city budget office would say almost nothing about the move, saying only that the current surcharge for operation of the city’s 911 emergency center expires July 1 and “we are working with the General Assembly on an extension bill.” […]

Steve Brown, House Speaker Michael Madigan’s spokesman, confirmed the matter is pending, but “I don’t know that the (tax) numbers have been finalized.”

As of the other day, the mobile phone folks appeared grudgingly willing to settle for a $1 hike. We’ll see where it ends.

The city originally asked for no cap at all.

* In other news

Cook County leaders said Tuesday they’ll offer a plan to the Legislature this week to shore up a pension system expected to go into the red “in a big way” in the decades to come.

But Ivan Samstein, the county’s chief financial officer, could offer few specifics to explain how the county would fund the proposed $146.9 million increase in its contributions during the 2016 fiscal year — other than by trying to “make county government more efficient.”

“You do those things first and then you talk about taxes afterward,” Samstein said.

Tax and fee increases are a last resort in fixing the county’s pension system, he said — but not off the table.

* Meanwhile

For the first time since slot machines began to appear in bars and taverns across the state in summer 2012, video gaming recorded its first month-to-month drop in tax revenue last month. Illinois’ cut of the industry’s profits fell about 2 percent in April from March, records show.

That decrease in revenue amounted to about $300,000 less in taxes paid. And that’s despite the continued rise in the number of video gaming licenses in Illinois, which grew 4.5 percent from 15,667 in March to 16,380 in April.

But individual machines still took in about $106.45 in net income on a per-day basis — above the monthly average of $96.16. And the tax revenue collected last month outpaced February’s numbers by about 19 percent.

The bottom line: Video gaming experienced only its second-best month in April.

It should also come as no surprise that the boat people want lots more restrictions on video gaming establishments to protect their former monopolies.

- Posted by Rich Miller        


10 Comments
  1. - OneMan - Tuesday, May 27, 14 @ 11:40 am:

    The average machine revenue number is a bit of a misnomer if you are going month to month…

    They calculated it by taking the Net Terminal Income and dividing by the VGT Count. The problem is the VGT count is a end of month count along with the total revenue, as machines get added they don’t have a full month of operation but are still used in the monthly average but may (and likely didn’t) operate for all 30 days of the month.

    Also look at the drop off at the Road Ranger in Springfield…


  2. - wordslinger - Tuesday, May 27, 14 @ 11:45 am:

    I wonder how many folks know they pay a monthly tax on their cell phone?


  3. - funny guy - Tuesday, May 27, 14 @ 12:16 pm:

    The $2.50 charge is the 9-1-1 fee–to be used exclusively for 9-1-1 (and homeland security) related costs. It applies to all phones, cell and landline. In addition, the City imposes a 7% telcom tax on all phones.


  4. - Formerly Known As... - Tuesday, May 27, 14 @ 1:05 pm:

    From a WTVO story last month

    == Illinois Ranks in Top Five States with Highest Cell Phone Taxes

    ROCKFORD: Cell phone taxes and fees are on every wireless bill, but in Illinois get your wallet out. “It’s outrageous. It’s outrageous,” said Customer Greg Clark.

    On top of a 5.6% Federal Tax Rate, Illinois slaps on an extra 8.88% State Sales Tax and a 15.81% State Wireless Rate. ==


  5. - lake county democrat - Tuesday, May 27, 14 @ 1:06 pm:

    I’m guessing this is a fairly regressive tax: nearly everyone except the most impoverished has a cell phone these day. The rich guy/gal with the latest iPhone and an unlimited data plan pays as much as somebody with an old flip-phone?


  6. - VanillaMan - Tuesday, May 27, 14 @ 1:08 pm:

    If taxes were too high on cell phones, users would notice and complain. Since they are not - the tax is OK to jack with.


  7. - Product of the 60's - Tuesday, May 27, 14 @ 1:32 pm:

    Oh for the old Ma Bell days…..everyone loved to hate her, now a days a phone is probably considered a god given right by anyone under 30.
    Doubt if many look at their cell phone bill, and if they do, it’s just one tax after another, oh well, gotta have a phone.
    Are we still paying Johnson’s Vietnam War tax that was applied to all phone bills, or did that finally get taken off a few years ago?


  8. - Anon - Tuesday, May 27, 14 @ 1:44 pm:

    Since phone service is considered a basic amenity, this would be another regressive tax, not based upon ability to pay, imposing a higher effective rate on those with lower incomes than those with higher. I’m waiting to hear from opponents of the graduated income tax who argue that an equal tax rate is the most fair.


  9. - Formerly Known As... - Tuesday, May 27, 14 @ 2:03 pm:

    == waiting to hear from opponents of the graduated income tax who argue that an equal tax rate is the most fair. ==

    Just as others are waiting to hear from supporters of the graduated income tax who argue that an equal tax rate for all is unfair.


  10. - Lou Skunt - Tuesday, May 27, 14 @ 4:10 pm:

    Don’t waste your money video gaming at a bar. The payouts stink, and it really feels rigged.


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