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Tunney Pushes To Eliminate City’s Head Tax

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Ald. Tom Tunney (44th)

Ald. Tom Tunney (44th) (Credit: CBS)

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CHICAGO (CBS) – Ald. Tom Tunney (44th) has begun a new effort to do away with the city’s employee head tax, which affects business owners.

As WBBM Newsradio 780’s Bob Conway reports, Tunney has introduced an ordinance that would do away with the $4-per-month employee head tax over a period of four years.

The Chicago Sun-Times is reporting the city would lose $19.6 million in tax revenues if the head tax were eliminated. But the alderman says the tax impedes businesses from hiring new employees.

LISTEN: Newsradio 780’s Bob Conway reports

Tunney introduced the ordinance at the City Council meeting Wednesday. Together with Ald. Brendan Reilly (42nd), he introduced a similar ordinance two years ago.

But then-Mayor Richard M. Daley rejected the ordinance then, instead proposing waiving the head tax for two years only for newly-hired employees.

LISTEN: Newsradio 780’s Bob Conway reports

In reintroducing the ordinance, Tunney said he’s well aware that new Mayor Rahm Emanuel inherited an annual operating deficit approaching $700 million — and $1.2 billion when unfunded pension liabilities are factored in.

But, the alderman argued that $5 million-a-year should not be hard to find.

“Eliminating this tax is important to business. I think it can be done. In our search for cost-efficiencies and savings, we can find time to send a signal to the business,” he said.

“We’re going to bring in businesses to hear what a negative impact it has on their ability to hire new workers,” Tunney continued. “The most important thing we can do is to provide every incentive for people to add to their payrolls. This could be a job creator, which would help the business climate and, ultimately our budget issues.”

Pressed to identify cuts that could be made to offset head tax relief, Tunney could not come up with any “off the bat.” But, he said, “The mayor is aware I’ve submitted this. He campaigned on reducing the head tax. We all have the same goal. I’m gonna try to help him in every way I can to find new revenue.”

Daley’s father, former Mayor Richard J. Daley, proposed the head tax in 1974 to ward off a city income tax. It has been a giant thorn in the side of business every since.

In 1994, Richard M. Daley lopped a dollar off the head tax, excused businesses with fewer than 50 employees and said it would be the first step toward a gradual phase-out.

But that never happened. Three years later, union leaders agreed to a series of pension reforms intended to free up enough cash for a $20 million property tax cut, a $200 million bond issue for neighborhood improvements and another round of head tax relief.

Tunney is a business owner himself. He owns the Ann Sather’s restaurant chain, which has its flagship location on Belmont Avenue in his Lakeview ward.

The Chicago Sun-Times contributed to this report, via the Sun-Times Media Wire

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