Chicago will receive $10 million more in tax revenue this year than expected, acting revenue director Charles Sawyer estimates.
The shift from a projected revenue of $581 million, made before the start of the year, to $591 million reflects healthy city tax collections, 8 percent ahead of this time in 1984. The Department of Revenue has collected $385 million so far this year, compared with $358 million last year for the same period.
The total revenue projection for 1985, made at the beginning of the year, was $834 million, which includes money from the state and federal governments.
”Looking at all the numbers and where we are . . . we should be an additional $10 million ahead,” Sawyer said.
The good news for the Washington administration comes a week after the mayor unveiled the city`s first $2 billion budget, balanced without consideration for nearly 50 pending labor contract negotiations. A 1 percent pay increase could cost the city $10 million. Mayor Harold Washington has said pay increases cannot be estimated, however.
Asked where the money will come from when the negotiated contracts are approved, Sharon Gist Gilliam, the city`s budget director, said, ”We`ll take a look at our revenues and make some decisions.”
Ironically, the upbeat financial picture has not resulted from new, controversial revenue sources. The best revenue flow comes from long-standing sources, such as the transaction tax applied to personal-property leases. Revenue from that tax was projected at $46 million for the year, but Sawyer said the department now expects to reap $48 million.
Income from controversial programs, such as the amnesty program and the
”use” tax, is down.
The Chicago City Council approved a tax amnesty program early in the year, allowing delinquent businesses to avoid late-payment penalties by paying the balance due within a six week period. The program applied to all city taxes, including the amusement tax, employers` expense tax, hotel tax, parking tax, cigarette tax and other taxes paid directly to the city.
In passing the compromise plan, aldermen estimated the city would collect a needed $10 million to balance the city`s 1985 budget, but only $6.1 million was collected.
The city tried to recoup overdue ”use” taxes owed by Chicago residents who have bought motor vehicles in the suburbs and hoped to get $1.5 million this year, but Sawyer said only $509,000 has been collected.
”Shortfall problems don`t present an overall problem,” Sawyer said.
”If you add all the pluses and minuses, we`re coming out ahead.”
The department has already collected $10.7 million from parking ticket scofflaws and expects an additional $10 million by the end of the year. The parking fines are being collected by Datacom Systems Inc., a private agency.
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Although the city`s portion is only $6.4 million of the $10.7 million, Sawyer defends the fact that more than $3 million is going to the collection agency.
”That $6.4 million was written off a long time ago,” Sawyer said.
”That`s $6.4 million that the city wouldn`t have had otherwise.”
To provide for better revenue collection in 1986, Sawyer said, the department`s records will be fully computerized by midyear.