CHICAGO (STMW) — Chicago’s cable television customers will see a modest increase in their monthly bills, thanks to a modified amusement tax exemption tied to Mayor Rahm Emanuel’s 2014 budget.
To raise $9 million for enhanced cultural programming and chip away at a $338.7 million shortfall, Emanuel wants to increase — from 4 percent to 6 percent — the amusement tax tacked on to monthly cable bills.READ MORE: DuSable Museum Of African American History To Reopen On Juneteenth
Chicago’s two-tiered amusement tax was increased by 1 percent in 2005 and by 1 percent again in 2009. It now stands at 5 percent for mid-sized venues and 9 percent for large sporting events. The lower tax rate applies to live theatrical, musical and cultural performances in venues with more than 750 seats. Smaller theaters are exempt.
Until now, cable customers have enjoyed a 5 percent exemption and paid just 4 percent. Under Emanuel’s plan, the exemption will drop to 3 percent, forcing cable customers to pay a 6 percent amusement tax.
Cable companies have routinely increased bills 3 to 4 percent annually, without any change to the exemption. If they continue to do that, then customers would face a combined increase as high as 6 percent.
It was not known precisely how much the smaller break would cost the average cable customer. But City Hall insisted that it would only be a few dollars a month, at most.
The amusement tax is on the cable companies themselves. Although it’s always passed along to the cable customers, City Hall points out the companies can chose to eat the tax.
At least some of the money will be used to bolster, “Night Out in the Park,” which brings concerts, circuses, movies and dance programs to Chicago’s neighborhood parks.
Four years ago, then-Mayor Richard M. Daley tried to get around a federal law that appeared to prohibit cities from taxing direct-broadcast satellite services provided by satellite dish companies.
The end-run would have required DirecTV and Dish Network to give the city’s Revenue Department the name, address and phone number of all of their Chicago subscribers, so the city could do the billing.READ MORE: City Council Committee Advances Plan To Cut Off Retail Liquor Sales At Midnight -- Will It Make A Difference For Crime?
Customer billing information would have been due by Aug. 15 each year — unless DirecTV and Dish volunteered to “collect and remit” the tax itself to the city. The companies also would have been required to warn subscribers they were “liable for the amusement tax” and “may receive a separate bill from the city.”
But after meeting with satellite industry attorneys, Daley acknowledged that the proposed end-run was illegal and dropped the idea like a hot potato.
Instead, he leveled the playing field by reducing the amusement tax tacked on to monthly cable bills — from 9 percent to 4 percent.
Emanuel had considered raising the amusement tax across the board, but decided against it amid fierce opposition from Chicago’s professional sports franchises.
Just last week, Blackhawks owner Rocky Wirtz went public with his opposition in an interview with Crain’s Chicago Business.
“It’s important to either freeze [the amusement tax] or reduce it to incentivize teams to reinvest, instead of trying to kill the goose that lays the golden egg,” Black Hawks owner Rocky Wirtz was quoted as saying.
Wirtz, an investor in the company that owns the Sun-Times, could not be reached for comment. In the Crain’s interview, he also questioned the city’s use of $88.6 million in annual amusement tax revenue.
“There’s nothing that I see that the amusement tax is put back into that helps any of the teams…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,” Wirtz said.
Ald. Tom Tunney (44th), the owner of Ann Sather’s Restaurants whose ward includes Wrigley Field, also vowed to oppose any attempt to increase the amusement tax, which could have left Chicago with the highest ticket tax in the nation.MORE NEWS: Weapons Cache Found In Avalon Park
(Source: Sun-Times Media Wire © Chicago Sun-Times 2013. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)