Tagsales tax

Why food and drinks cost more downtown

The Metropolitan Pier and Exposition Authority is a quasi-governmental body created by the Illinois legislature, similarly to how it created the Chicago Transit Authority. The authority is also known as McPier. McPier is able to add 1% sales tax to the sale of food and drinks in three areas in Chicago, apparently to support the operations of Navy Pier (a place I avoid) and McCormick Place. I’m writing this post because of an article I read on Crain’s Chicago Business about Chicago having the highest restaurant tax rate that failed to describe the area in question.

The main area is downtown, although the boundaries extend far beyond downtown. I first came encountered the tax as a manager of the Jamba Juice at 1322 S Halsted Street (at Maxwell Street) in the University Village development on UIC’s south campus. The other two areas encompass Midway (MDW) and O’Hare airports (ORD). I haven’t mapped them to see exactly how much land beyond the airports the areas encompass.

The downtown area is described in 70 ILCS 210, section 13, as follows:

(b) (3) that portion of the City of Chicago located within the following area: Beginning at the point 150 feet west of the intersection of the west line of North Ashland Avenue and the north line of West Diversey Avenue, then north 150 feet, then east along a line 150 feet north of the north line of West Diversey Avenue extended to the shoreline of Lake Michigan, then following the shoreline of Lake Michigan (including Navy Pier and all other improvements fixed to land, docks, or piers) to the point where the shoreline of Lake Michigan and the Adlai E. Stevenson Expressway extended east to that shoreline intersect, then west along the Adlai E. Stevenson Expressway to a point 150 feet west of the west line of South Ashland Avenue, then north along a line 150 feet west of the west line of South and North Ashland Avenue to the point of beginning.

View Metropolitan Pier and Exposition Authority boundaries in a larger map. I created this map by following the directions in the block quoted text above. Do not use this map to determine if your business is required to collect and remit the McPier tax. It’s not an accurate map: I didn’t measure 150 feet from any street line – I guessed.

Also interesting: all drinks (alcoholic and sodas) and food sold on boats that arrive at or depart Lake Michigan shores within the area described above are subject to the tax. And more interesting is that sales at stores whose principal income is from drinks (alcoholic and sodas) and food for off-site but immediate consumption are also subject to the tax. You can supply the Illinois Department of Revenue with your sales tax information.

I like what Bonnie McGrath said in the Chicago Journal last year:

Is this fair? Why should we South Loopers–not to mention the other neighborhoods near downtown–have to pay extra for restaurant food? What exactly are we getting that other Chicago residents don’t get that we have to pay an extra tax?

I’d also like to know why McPier needs additional revenue to supplement the millions (maybe billions?) it revenue it receives from vendor fees, events, rents, and other sources in the operation of Navy Pier and McCormick Place.

McPier also gets a cut of hotel room bookings.

Voting on bikeways in San Luis Obispo County

Session summary: A staffer at San Luis Obispo Council of Governments (SLOCOG) wants to learn about ways to have residents learn about proposed bikeways in the jurisdiction, their costs, and possibly vote or rank them to prioritize installation. SLOCOG is also considering a referendum for a sales tax that would fund transportation improvements to pay for road maintenance, transit service, and bikeways. This tool could be used to decide how the sales tax revenue is spent.

UNEDITED

SLOCOG – what a funny name
250-300k population for the county.
slow-growth county, not affordable

GIS, web interface – routes of bikeways, identified by color
$30m over 25 years
bike plan
Oh, you want that class 1 to the beach? That’s $15m
survey of unmet bike needs

This is what we want to do, this is the money we have.
This is where 10k people want a bike lane.

passenger car sales tax (I missed how the sales tax would work)? county sales tax increase to fund transportation
quadruples range of options.

Adriel Hampton: Bright Idea – ideation, vote them up and down
Lot of marketing, moderation, outreach
Just cuz you build it, people don’t come
You have to market it hard.

Me: Will there be a soft side to this? In-person charrettes? No, but will consider.
Have the potential bikeways already been identified and have all had their costs estimated?
Yes, bikeways identified.
Costs will be estimated soon based on past construction projects.

Starting with bikeways, then complete streets modules, streetscapes.

Jeff Wood:
Phily Planning Organization, web interface – click on the projects you want
Portland
Sacramento – Willingess to pay game?

Matt: How do they frame sales tax? This is the touchiest subject for us.

OpenPlans GeoExt application.

Adriel: I think scenarios is better than open.
Matt: We’ve made the plan, have the network. We need the people to justify the funding decisions we make.
[email protected]

Leah: TechSoup – let county-wide bike coalition get grants to pay for software/application.
Google StreetView – have the trike feature your best bike route.
LA Times, if you do this in the budget, then this happens. Generated a lot of buzz.

Sean Hedgpeth: Capital and operating budgets.
I added about federal funding not paying for maintenance.

Matt: rideshare.org
Richard: 66% votes needed to approve the sales tax.
Sean: Have to sell sales tax with potholes.
Matt: Cycling will get 7% of sales tax.

What’s the county’s policy on open data? It’s not that it’s hidden, it’s just that the organization and outreach is not there.

SidewalkChalk (?, url)

Adriel: SeeClickFix – civic points – put a gaming aspect on things. participation rates are so low.
1-9-90 model. Create, read, do nothing to web content.
Look at
Adding some goofy elements to project.
So anti-Farmville until I found out about their special corn that would help Haiti

Road pricing is more fair than other funding schemes

I’ve written several papers on congestion and road pricing*. The most common type seen in the United States is HOT (high occupancy tolling) lanes. This is where drivers can pay to use uncongested lanes; drivers who carpool may use the lane for free or at a discount. Transit buses can always use the lane for free.

From the University of California Transportation Center comes new research on paying for roads with congestion versus paying for roads with sales taxes and their respective burden on poor residents.

Will research show that more people will benefit from paying sales tax to support a transit system than from paying (all kinds of) taxes to support a highway?

Their finding is that funding transportation with sales tax is less fair than funding with congestion pricing. In the latest issue of Access, Lisa Schweitzer and Brian Taylor write:

This analysis has focused on one side of the ledger: the question of who pays. But transportation systems have both costs and benefits. Indeed, the access benefits of travel are transportation’s raison d’être. So while regressivity can be viewed as a cost of road pricing (and of most other ways of paying for roads), pricing confers transportation benefits that other transportation finance mechanisms do not. Tolls and taxes can both pay to build a road. But congestion pricing can also reduce traffic delays, fuel consumption, and vehicle emissions, often to a surprising degree. Sales tax finance for transportation, by comparison, does none of these things.

I think the appropriate direction of this research should next discuss and examine the fairness of using sales taxes to provide operational and capital funding for transit. In Chicagoland, the Regional Transportation Authority is partially supported by a local sales tax. While sales tax financing for road building may not reduce traffic delays, fuel consumption, or vehicle emissions, supporting a reliable, robust and expansive transit network can do all of those things by reducing the number of single occupant vehicles on the road.

*Here’s one I’ve written: Implementing value pricing on a highway in Southern California, which I excerpted in HOT lanes and equity.

The truth about Wal-Mart’s contribution to the tax roll

I recently wrote about how Wal-Mart plans to expand its reach in Chicago in a big way (30 new stores big). Politicians around the country consistently like to be heard saying how one way the store(s) will benefit the city is the additional tax revenue the city will see from property and sales tax contributions. Here are selected quotes from Chicagoans:

On Tuesday, [Chicago Mayor] Daley noted that a Wal-Mart expansion would pave the way for sales tax windfall for the cash-starved city budget.

In suburban Cook County, about 20 percent to 30 percent of all sales tax revenue comes from Wal-Marts, Daley said.

Chicago Sun-Times, June 15, 2010

“Everyone realizes we need the tax revenue,” [Alderman Anthony] Beale [9th Ward] said.

Chicago Sun-Times, May 5, 2010

Ald. Richard Mell, 33rd, a pro-union alderman, lamented Wal-Mart’s domination of the nation’s retail market and its tendency to sell foreign-made products, but voted for Pullman Park because of the need for jobs and additional tax revenue.

Chicago Tribune, June 30, 2010

Comparatively, Wal-Mart brings in little property tax revenue on a per acre basis, according to a study from Sarasota County (Florida) and Public Interest Projects and posted by Citiwire. I’ve summarized their findings:

  • Single-family home: $8,200 per acre
  • Wal-Mart and Sam’s Club: $150.00-$200.00 per acre
  • Southgate Mall: $22,000 per acre
  • High-rise mixed-use project in downtown Sarasota: $800,000

That last one’s the kicker! From the Citiwire article, “‘It takes a lot of WalMarts to equal the contribution of that one mixed-use building,’ [Peter] Katz noted.” Read the full story for more examples and for more discussion on how this specific breakdown of costs and benefits is only one way to look at fiscal and retail impact.

If the same tax revenues were true for Chicago or Cook County (and I can’t say it is or isn’t), then the city planners and aldermen should be seeking developers to build high-rise mixed-use projects. Right.

But the issue Chicago and other cities have is that Wal-Mart is one of the most willing developers – they will build where no one else will. They have capital that no one else has. They have the resources to sway the population. It’s more politically difficult to resist such a willing partner like Wal-Mart than it is to seek relationships with developers who have the resources to create more beneficial mixed-use projects in the neighborhoods Wal-Mart seems to prefer.

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