Chicago, IL – Cook County Board President Toni Preckwinkle’s proposal to introduce a new 1 percent hotel tax, after raising the sales tax on consumers by $474 million, would negatively impact Chicago’s tourism industry at the worst possible time.
The Chicagoland Chamber of Commerce argued in July that the decision to raise the Cook County sales tax should have been a part of the regular budget process so as to avoid asking businesses and individuals for more money a second time. The Chamber believes President Preckwinkle and the Cook County Board of Commissioners can find other cuts, rather than increasing taxes by another $31 million.
If a new hotel tax and the recent sales tax increase cause tourists and convention businesses to choose other cities over Chicago, Cook County will lose revenue, its citizens will lose jobs and its businesses will lack competitiveness. The proposed 1 percent hotel tax hike would increase Chicago’s rate to 17.4 percent, while competitors such as Orlando (12 percent) and Las Vegas (12.5 percent) have much more modest rates.
Chicago’s tourism industry is already less competitive as a result of Choose Chicago’s funding freeze. This proposed hotel tax would further damage the Chicagoland region hotel and tourism industry’s ability to support jobs and remain competitive.
“A new 1 percent tax on hotels will make an already challenging 2016 for our hotel and tourism industry even more difficult,” said Michael Reever, vice president of government relations for the Chicagoland Chamber of Commerce. “Cook County’s tourism industry supports more than 190,000 jobs. If we lose convention and tourism business because of this new hotel tax, cuts and layoffs could impact more than 11,000 hotel employees who live in Cook County. This tax will not only impact tourists, it will impact the entire region. This tax cannot be viewed in a policy vacuum.”
Before attempting to pass this tax increase, the Chamber urges President Preckwinkle and the Cook County Board of Commissioners to consider the full economic picture by looking for more cuts, efficiencies, and opportunities to help consolidate the County workforce and salaries.
Click here to view Reever's full testimony.
Click here to view a fact sheet on the Cook County hotel tax.