Would a ten 139 3/17/10 - WHOLE - BILL 100118, etc. percent property tax increase raise a similar amount of around a hundred million dollars?
I believe that to raise a similar amount, we would need something closer to or percent. 8
But a ten 9 percent would give you about a hundred 10 million dollars? 11
Ten percent would still get you a hundred million dollars. So for the homeowners in the majority of the City, in the majority of neighborhoods in the City that probably pay -- they probably pay a thousand to $1,500 in property taxes -- I personally pay $1,500 in property taxes -- a ten percent tax increase would be $150, which 140 3/17/10 - WHOLE - BILL 100118, etc. is half of the fee, and if a majority of people pay even less than I do in property taxes or the same, then essentially they would be paying less, get a tax deduction, and it would have the poverty exemption. If it raises the same amount of money or similar amount of money, isn't that more fair?
Yes. If it's structured in that manner, it could be more fair. (Applause.)
Thank you, Madam President. I know we've been at this for a while, but, Dr. Schwarz, just a little follow-up on Councilman Kelly's point, because I didn't really think about it the way he said it, but I think it makes certainly a lot of sense. 141 3/17/10 - WHOLE - BILL 100118, etc. How are those kind of businesses that he described, how are they going to be taxed on this under this proposal on the soda tax? I mean, they're not taxed per cup, right? They're taxed as far as --
Ounces of sale. And the issue specifically about the beverages is syrup. So we know, for instance, that in a soda fountain, syrup is diluted with seltzer water, sparkling water, carbonated water to produce a beverage and that it reconstitutes a certain amount of syrup to constitute a certain number of ounces of beverage, and that's what we would use to calculate.
So wouldn't you agree at least in that case that because the retailer doesn't know exactly when the customer gets his cup, his or her cup, what they're going to do, I mean, in that case, they almost have to spread it out, right? Because they don't know really what the person is going 142 3/17/10 - WHOLE - BILL 100118, etc. to -- what kind of beverage they're going to take. Would you agree with that?
All right. So at least in that case, and there's a lot of those stores, it doesn't necessarily mean they're going to cut down on sales of soda as opposed to diet soda, right?
The incentive, though, there is to cut down on the number of ounces. So rather than handing the consumer a cup for 35 ounces, there might be an incentive to hand the consumer a cup for or 20 ounces. 17
From a health 19 point of view, if we look at excess 20 calories in the American diet, cutting 21 down on portion size would make a 22 substantial difference to obesity in this 23 country. 24
And I 25 understand cutting back. We all agree 143 3/17/10 - WHOLE - BILL 100118, etc. with that, but I have to ask this, and this is a bit of a smart-aleck thing to say, but wouldn't you agree that a lot of the differences of at least childhood weight gain, obesity, is inactivity?
And I guess there's no way to do this, but if we're really going to hit the core root of why it's increased, shouldn't we be considering a business privilege tax increase on video games? (Applause.)
So, Councilman, if you would like to propose that, the Health Department would be supportive, and we would be supportive of any honest effort to reduce obesity in the City and at the same time meet the revenue requirements that we have.
I'm not 144 3/17/10 - WHOLE - BILL 100118, etc. fighting with you on this. I'm just throwing that out there --
-- because we've heard about that, but I think really -- I think it's the inactivity. Kids don't go out there and play anymore. End of speech. Thank you. Thank you, Madam President.
I see that we have a couple Councilmembers that have their lights on. They had not had an opportunity to ask any questions, so we'll take them first. Councilwoman Sanchez.
Thank you, Madam President. Good afternoon. I want to continue the line of questioning my colleague Councilman Goode was having as it related to the trash fee. Last year when this was proposed, many of us saw it 145 3/17/10 - WHOLE - BILL 100118, etc. as totally dead on arrival, and that's why I'm shocked that it has come back to bear. We spent six months this year with Councilman DiCicco and the Streets and Services Committee looking at the trash fee, the initial commercial presentation around 500 and worked it down through 300 and then worked it to 150, and it took us six months to get some agreements around commercial pick-up. So I'm just shocked that the Administration would bring us something that created such a unanimous support around this Council saying we were not going to do a trash fee. So in light of that, what were some of the property tax proposals that you guys considered and why was that not one of your options, in light of the fact that I think we can agree that it's fairer and less regressive?
Based on last year's experience where we did propose a property tax increase and we understood Council was very opposed to that. 146 3/17/10 - WHOLE - BILL 100118, etc.
I'm going to try to say this nicely. You're saying that you were reluctant to consider a property tax increase because of how it was received in Council?
We looked at a property tax increase. We looked at all of the major revenues. We had very extended conversations about all of the revenues, and given the concerns that we heard from Council last year about property tax increases, particularly surrounding the absence of an Actual Value Initiative that anyone had any confidence in, we felt that was not an avenue to pursue.
My question is, were you reluctant to suggest a 147 3/17/10 - WHOLE - BILL 100118, etc. property tax increase because of the reaction in Council last year? Was that your statement?
It was one of the things that we considered, and at the root of that, as we understood it, was the concern that the actual values and the assessments were in such a state of disrepair, if you will, that it didn't make sense to move forward.
So it was not really because of Council, but it was your own decision not to do it?
I think -- that's correct, sir. It was the concerns that we heard, the genesis of the issues that were raised by Council, most notably about actual value, that we said this is probably not an avenue for us to pursue.
Even if it's better and more fair? Thank you, Madam President.
You're welcome. 148 3/17/10 - WHOLE - BILL 100118, etc. (Applause.)
And that's why I guess I'm confused, because there was more support around no trash fee than there was around property tax last year in the discussions in Council. So I just want to be clear. The decision not to provide Council with an option around looking at a fairer tax, property tax or land tax, which would be even fairer if we're so concerned about the assessments, were those options reviewed and why was a decision not to present that as an option to us?
Councilmember, we reviewed all of those options. We did look at all of the major taxes, and just to sort of tick them off, wage taxes are down three percent this year, so in our view, raising that rate in the existing economy didn't seem to be a good idea. We had just raised sales taxes. The 149 3/17/10 - WHOLE - BILL 100118, etc. transfer tax is at almost half of what it was at its peak, and so raising the transfer tax didn't make sense to us in the economy that we were dealing with. We increased the parking tax in 2009 and then used most of that to help us tide through the 2009-2010 budget revisions that we had to do because of the economy. And we looked at the property tax, and, again, based on what we heard with respect to the concerns associated with the assessed value, the concerns about the size of a potential increase, we thought that was not an avenue to pursue.
So you did the analysis and we should be expecting -- and I'm assuming you're going to share that with the Chair in light of Councilman Green's request. What were the other revenue options that were explored and how do we get to the same a hundred million dollars in fairer, less regressive taxes looking at -- clearly, when we talk about the 150 3/17/10 - WHOLE - BILL 100118, etc. most progressive tax is wage, because you only pay it if you're working. But that not being an option for the things you listed, when you looked at property, did you also look at the land tax, which is based on just land purely and not the assessment where we've had the questions? Did you look at land?
Well, even if you do a land tax, you have to assess the value of the land. You have the same issues. You have to have good, reliable data. So it's the same issue as with a property tax. So we didn't look at a separate land tax, but even if we did, you have the same issue.
But isn't our land situation a little bit better than the assessment?
Thank 151 3/17/10 - WHOLE - BILL 100118, etc. you. The Chair recognizes Councilman Clarke.
Thank you, Madam President. I'm going to shift to the soda tax. I'm going to stay off of trash tax for a minute. Dr. Schwarz, out of all of the hires that the Mayor has, and not to diminish anybody else that he's hired, I actually out of everybody, I trust you more than any other of the new hires.
I've actually asked you about family issues on occasion, which I don't normally do. But in next fiscal year's budget there's a proposal for $20 million towards the obesity program?
As I look on this list -- and I think we should do everything on here. I agree. But when I look at the things that will conceivably actually cost money and things that can be done with just simply order, I don't see how that comes to $20 million. And I'll just kind of go down the list, and correct me if I'm wrong. Increasing the value of food stamps. I can see that costing us money, although don't you have to get the state involved in that? Food stamps are issued from the state, or could we supplement it?
So we have a model of a program that's been done in New York and tried in Philadelphia.
Okay. I got to get short answers because I got five minutes, because, like I said, I trust you. Establishing affordable farmers' markets in low-income 153 3/17/10 - WHOLE - BILL 100118, etc. communities. That shouldn't cost a dime, basically just authorization to locate on the corner, because I have a couple of them.
And facilitation. I mean, the issue in part is that it doesn't happen now because there are costs to set up and maintain and clean up and police the farmers' market. So there are costs that are --
I've signed off on at least four of them in my district and it didn't cost us a dime. That's my understanding.
Spanning network of corner stores. That could probably cost money. Improving the quality of food 154 3/17/10 - WHOLE - BILL 100118, etc. in schools. That's simply somebody saying don't put junk food into schools. That shouldn't cost us a dime. Enacting a broad-based media campaign. That's going to fill some media consultant's pocket, but we can limit that. Instituting bans on junk food. I went through that again. We can do that without a dime. Providing nutrition education and enforcement of the menu labeling law. I don't know why that would cost a lot.
It's provided through curriculum. The School District has been trying to do it and is trying to figure out how to finance it.
A lot of money, no. It's the first set and the second -- the third set.
Creating physical activity standards for 155 3/17/10 - WHOLE - BILL 100118, etc. after-school programs. That shouldn't cost us anything. Expanding a pedestrian and bike network throughout the City. If you're going to align the whole City and realign traffic, maybe. Incorporating active living conditions in the neighborhood planning. That shouldn't cost us a dime.
So if we look at the first piece, I can give you some ideas about how, for instance, the Corner Store Initiative has been done both here and in other cities. So we have actual costs. There are three levels of intervention. The first relates to education and helping with marketing, and it's not very expensive but would cost for a thousand corner stores about $3 million. 156 3/17/10 - WHOLE - BILL 100118, etc.
To do education and appropriate marketing within the corner store. So to position the corner store to do sale of fresh fruits and vegetables for substitution, the cost from New York and the work that's been done here suggests that it's about a $3,000 investment per store, times a thousand stores, which is about $3 million.
One. Two, training and technical assistance for the store to be able to do the sale, the distribution and so forth and then the cost of equipment for the store comes to somewhere between $40 and $60 million for a thousand corner stores.
So we will 157 3/17/10 - WHOLE - BILL 100118, etc. be taxing the corner stores, so we can give the money back to them for --
So why wouldn't we give consideration to some sort of credit as opposed to imposing a tax on sodas?
So if we have a good way to do it and their sales will equal the amount that's needed for the fixed cost to install refrigeration and so forth, which I don't think it will, based on sales in a given store. It would work. The issue is that for a given store, there's an investment that's needed to provide the equipment and the display. That is the biggest ticket item here. We know that stores can, once that cost is paid, have a sustainable model for sale of fresh fruits and vegetables 158 3/17/10 - WHOLE - BILL 100118, etc. in communities. That is what is being -- would be proposed.
Okay. And I know I'm way over my time. Sorry, Madam President. I know currently we have a loan pool and we have all types of funds that provide assistance to stores who want to borrow money to improve their stores and create businesses, things of that nature. Why couldn't we come up with --
I don't -- I'm not the one who would know, but I get puzzled looks from my colleagues.
No, no. 17 I'm not talking to you, sir. I'm talking to you, but I wouldn't expect you to know that. I'm sorry. If there are opportunities -- we have all of the alphabet agencies that administer loan pools for businesses, and if you have a credit to a store and that credit can go towards the debt of the borrowing for the equipment and all the 159 3/17/10 - WHOLE - BILL 100118, etc. other things that you're talking about that will help this obesity program, don't you think that makes a little more sense?
The issue is repaying. These are grants, not loans. The fixed cost to do this isn't going to be repaid by the cost to the retailer.
Small grants to purchase or provide refrigeration and display.
All right. So we really are giving them the money that we're taking away in tax. All right. Give me a minute. Next round I'll have an answer. Thanks, Madam President.
And 160 3/17/10 - WHOLE - BILL 100118, etc. you said that they've had this tax for at least a decade.
Sure. Chicago's tax is on distributors, who pay three percent of sales and nine percent on syrups. The magnitude of the tax, if the issue is magnitude of the tax, magnitude of the tax is less than the magnitude of this tax.
It is. It's specific to distributors both of beverage and of syrup.
I know you said that this has been in 161 3/17/10 - WHOLE - BILL 100118, etc. effect for a decade. Has there ever been a study conducted to determine if it's been helpful as far as the obesity issue?
That's a great question. So their tax began actually in 1993. The issue was that it wasn't studied at that time. The best that we have nationally is a study that looked at what is the difference in cost because of the difference in tax and the difference in real cost of beverages in different parts of the country, and that study is the one that came out about a week ago and showed that there's a decrease in consumption with an increase in cost.
Thank you. I see that we have Councilmembers Green, Sanchez and Clarke who want to be recognized. However, I think we're going to call a recess at this point in time and we'll return at 1:30. (Luncheon recess.) 162 3/17/10 - WHOLE - BILL 100118, etc.
The Committee of the Whole will resume its public hearing on Bill Nos. 100118 and 100131. The Chair recognizes Councilman Green.
Thank you, Madam Chair. I'd like to just talk about pay-as-you-throw a bit more. I know it's something the Administration looked at last year, and during last year's pre-budget briefings that were given to City Council, Deputy Mayor Rina Cutler suggested that that was one of the alternatives, and it got widely reported that that was one of the alternatives, and I'm wondering if we did any detailed analysis of that option this year or last year. COMMISSIONER TOLSON: I'm not aware -- Councilman, Clarena Tolson. I'm not aware that additional analysis was done after last year's 163 3/17/10 - WHOLE - BILL 100118, etc. budget session.
Was there any analysis done last year? COMMISSIONER TOLSON: At the time that there was discussions about pay-as-you-throw, yes, there were lots of discussions and analysis about it.
Is any of the analysis written in terms of how much we have to charge per bag or how many bags -- COMMISSIONER TOLSON: Yes, there's some material that's written.
So how many bags do we throw away a year? COMMISSIONER TOLSON: The honest answer is, I did not refresh myself on that system, so I can't answer that to you honestly. I'd be more than happy to get that for you, though.
Okay. So can you describe for me exactly what you recall is available? COMMISSIONER TOLSON: A 164 3/17/10 - WHOLE - BILL 100118, etc. pay-as-you-throw system would be -- the one that was proposed was a system wherein citizens would receive bags and pay a fee per bag. It wouldn't be a tax. It would be a bag system.
They pay a dollar for a small bag, $3 for a big bag or something like that? COMMISSIONER TOLSON: It was a one-sized bag, and there was some opportunity for -- I think it was considered. I don't know if it was in the final cut or not -- for those that might be of certain income levels to receive a certain number of bags at reduced costs or no cost.
And how much did that raise? COMMISSIONER TOLSON: Councilman, I would like to really have the data in front of me to answer your question properly. I'd hate to guess. It's been some time since I refreshed myself on that. 165 3/17/10 - WHOLE - BILL 100118, etc.
Okay. That's great. If you could -- that data is available? COMMISSIONER TOLSON: Yes, sir.
Could you provide it to the Chair today? COMMISSIONER TOLSON: Yes, sir.
Very well. With respect to the sugary drinks tax, I just want to try to understand where we are in terms of total revenue with respect to it. There's $77 million on an annualized basis is expected to be that, but that's a 16 percent discount from Rudd, and as you've 17 already acknowledged, because it's not 18 the same kind of tax that's in Chicago -- 19 it's not an excise tax, it's a tax that 20 would be paid by the retailer -- it's likely that at least in fast food restaurants where you can get your own drinks and other things, that will bring in even more than other cities because that problem doesn't exist there. 166 3/17/10 - WHOLE - BILL 100118, etc. So really in terms of the revenue that this is going to generate, why did we make the assumption that it's 77 million instead of, say, $90 million?
Steve Agostini, Budget Director. Councilman, we made that estimate after having an extended conversation with people at the Rudd Center, including the economist who is responsible for putting together their revenue calculator that's on the site. At the same time, we then -- I spent some time trying to reconstruct the numbers based on the original data, and really what we did is, we took sort of a reasoned guess. We thought that the 96.5 million that the Rudd Center calculator estimated was too high. I had a lengthy -- actually had a couple of lengthy conversations with colleagues in the Budget Office in New York City, who had proposed a similar tax a couple of years ago and they had also done a 167 3/17/10 - WHOLE - BILL 100118, etc. similar kind of discounting. I think their discounting was roughly about 4 percent, 15 percent. And we just thought 5 it was prudent to assume that it's a new 6 tax, we're moving into something that we 7 don't really have a lot of experience 8 with. The numbers from the Rudd Center 9 made sense, but it just seemed prudent to 10 take a discount to that number. 11
So how much 19 are current collections for all of our 20 business privilege taxes?
The last -- 369, I believe, for the current-year estimate, but --
Three hundred and sixty-nine million dollars. 168 3/17/10 - WHOLE - BILL 100118, etc. And we're going to increase business privilege taxes by what percentage?
Well, you asked how much we're increasing business privilege taxes, so I want to give you a full answer.
So for most businesses, there's no increase, because it only applies to one sector. Overall, you're probably talking about like a ten percent increase this year, going up next year.
So it's a 20 percent increase in business privilege taxes. And what industry or sector is it 169 3/17/10 - WHOLE - BILL 100118, etc. focused on? Who pays it?
It's paid by those individual businesses who sell sugar-sweetened beverages.
Well, explain that to me, because the business privilege tax gross receipts really -- it's not -- I don't believe -- is a net receipts tax for retail essentially? Do you only pay it at one level?
Would the wholesaler pay the tax and then the retailer that buys from the wholesaler pay the tax?
That isn't the way that it has been laid out, no. 170 3/17/10 - WHOLE - BILL 100118, etc.
I'm not asking how you're thinking about it. I'm asking sort of what the tax law is.
Councilman, we'll go back and check with Revenue, but I believe that it's, as you know, it's either on the gross receipts or the net income. I don't believe it's structured as a value added where the wholesaler or retailer wouldn't pay a portion of that. But we'll go back and look.
I thought our gross receipts tax did operate that way, where every level was paying some of it. That may be separate for retail. I don't know, but --
-- it's kind of scary that you guys don't know that. (Applause.)
Thank you, Madam President, and good afternoon. 171 3/17/10 - WHOLE - BILL 100118, etc. I'm very concerned about a pay-as-you-throw fee structure or tax. It seems to me that it would incentivize short dumping to reduce the amount of tonnage. And particularly in my district, in the 4th District, since the last year's cutbacks, we've seen a lot of short dumping, tires and other things, that we just found unacceptable by way of not being able to pick up. I understand -- and matter of fact, you might want to come up to the mike. Since last year's budget and the year before's budget cutback, what kinds of services had we curtailed within the Streets Department as a result of the budget crisis? (Witness approached witness table.) COMMISSIONER TOLSON: Yes. Some of the things that have been cut over the last couple of years probably is the way you're seeing the result, have included bulk trash, which would be 172 3/17/10 - WHOLE - BILL 100118, etc. things like refrigerators, air conditioners, water heaters, in addition to tires, which were collected at the curb. The alternative was for people to leave the tires with the tire collectors -- with the tire companies when they purchase a new one. And for the bulk materials, when purchasing a new refrigerator, have the vendor take away the old refrigerator.
Now, you didn't mention street cleanings and leaf pick-ups. COMMISSIONER TOLSON: I'm sorry. Yes. Those things too have been curtailed. I'm sorry. I was kind of narrowly getting back to your point that you had been making. We also eliminated leaf collection, the mechanical leaf collection program. We continued with the bag program, but we eliminated the mechanical. We closed some of our citizen drop-off locations, as well as we have almost eliminated all of our 173 3/17/10 - WHOLE - BILL 100118, etc. neighborhood residential cleaning has all ended. A lot of our commercial cleaning has also ended.
So as we look at revenue enhancements one way or another, at the end of the day, does that mean we get those services back? COMMISSIONER TOLSON: In Year 1 of the program, as we look at it right now, we're looking at an additional $2 million coming back to the Sanitation Division to support mechanical leaf collection, increasing the number of lots that are done between our department and the Managing Director's Office, as well as improvements with our neighborhood commercial cleaning program.
Is there anything in addition that we would receive based on -- I mentioned in my first round of testimony that people want to know the cost and then they want to realize the services. And is there an additional service that we will receive 174 3/17/10 - WHOLE - BILL 100118, etc. since you guys would be made flush? COMMISSIONER TOLSON: Not in Year 1, Councilman. Year 1 are the services I just described to you. In Year 2, however, we're looking at additional resources coming back to the division so that we can add on additional services. Those services have not yet been identified. However, we certainly can work along with Council and others to help identify what we need to do.
Let me say this to you: As you can see here, there's a lot of interest in what we do here, and it makes it difficult for us to say we're just going to write a blank check and we're going to tell you what you're going to get later. You might want to let people know what they can at least hope for by restoration of services and maybe even, God forbid, some additional services such as alleys and things like that that people are plagued with in my district. 175 3/17/10 - WHOLE - BILL 100118, etc. So can we -- we don't know what we're going to spend the other million 4 out of the 20 for the sugar tax, and we 5 don't know what we're going to get if we 6 indeed do the revenue enhancements. I 7 mean, that's a part of the equation here, 8 and we need to do a little better job, in 9 my opinion, of stating what they are. 10 Thank you, Madam President. 11 COMMISSIONER TOLSON: I agree, 12 Councilman, and I think the reason why 13 there's an open space there is so that 14 the dialogue can happen, not that we 15 pre-determine, but we're certainly open 16 to have discussion. 17
All I'm 18 saying is, we're real clear about what you want from the tax. We're not real clear what we're going to get as a result even if we did it. COMMISSIONER TOLSON: Thank you.
So you need to work on that. 176 3/17/10 - WHOLE - BILL 100118, etc. Thank you, Madam President.
You're welcome. The Chair recognizes Councilman Rizzo.
Thank you. I just had to comment on some of the decisions that the Administration is going to make. An example of, Commissioner Tolson, of, I think, a shortsighted decision to stop the mechanical leaf collection, this recent rain. I heard a traffic reporter on one of our local stations say that the intersection is flooded because the leaves have clogged the inlet. So I just hope the Administration -- all you did was save a few bucks for the Streets Department and you spent money of the Water Department to go out and clean all the inlets that the leaves that weren't picked up in the fall clogged during the most recent rainstorm. So I just had to say that, 177 3/17/10 - WHOLE - BILL 100118, etc. because you know I had an interest in that. And sometimes decisions that are made don't really wind up, at the end of the day, saving any money. All you did was spend somebody else's, the Water Department. So I just wanted to give you that one bit of input. No comment required, unless you want to. COMMISSIONER TOLSON: No. 12 Thank you.
You're welcome. The Chair recognizes Councilman Green.
Thank you, Madam Chair. Commissioner Tolson, how much do you spend on cleaning up short dumping and lots and sort of generally picking up trash from where it doesn't belong? COMMISSIONER TOLSON: One 178 3/17/10 - WHOLE - BILL 100118, etc. moment, Councilman. (Pause.)
I'm sorry. Did the Deputy Mayor want to testify? COMMISSIONER TOLSON: I just needed to borrow her glasses.
Oh, okay. COMMISSIONER TOLSON: Sorry. Councilman, cleaning up illegal dumping -- I'm just giving you a total very quickly -- the last full year that I have in front of me was about $1.9 million.
So with respect to a pay-as-you-throw type model, could you avoid short dumping by means testing? The giving away of bags, as you suggested, was part of your initial proposal? COMMISSIONER TOLSON: That would be part of the issue with regard to illegal dumping. The other part of the 179 3/17/10 - WHOLE - BILL 100118, etc. issue is, those that are dumping are not all residents, residential properties. Some of them are business properties as well, and some of it is also education for even those who are residents, because some people don't have -- don't place a quality or a value to the notion of clean streets or clean sidewalks and they illegally dump as poor behavior.
And we have that problem today. COMMISSIONER TOLSON: We have that problem today. But the comments that I had made before about the bag charge is that we have to be careful not to encourage more to slip to that side if there's a value in cost to it. That is why we have some of the illegal dumping with businesses, because instead of paying for the service or what they call subscribing for service, they prefer to illegally dump in some places.
I understand. This fee doesn't deal with 180 3/17/10 - WHOLE - BILL 100118, etc. businesses, though, does it, the currently proposed trash fee? COMMISSIONER TOLSON: No. This is for -- there are some businesses, yes, but this is only for those that the City collects. I was just trying to compare it to those that have private collection, the businesses that dump, and the reason why they dump.
Following up on Councilman Goode's line of questioning with respect to property taxes, you have basically -- I think there was an acknowledgment that it would be far less regressive to do an across-the-board property tax increase instead of a flat trash fee, and the conclusion was that that's fairer. Would you say, assuming we provide extra resources for short dumping and enforcement and things like that, would you say it's fairer to actually charge people for the amount of trash they throw away than a flat fee? COMMISSIONER TOLSON: I think 181 3/17/10 - WHOLE - BILL 100118, etc. if the intent is simply to have people pay for their trash, yes.
And what added bonus do you get if they pay for their trash as opposed to just a flat fee? COMMISSIONER TOLSON: What added -- I'm not sure I understand your question.
Do you think that would increase recycling? COMMISSIONER TOLSON: If they pay -- yes. If people have to pay for their trash and recycling did not have a cost, people who -- most people would be incented to recycle more, though there would be some who would simply just make the trash not theirs and would illegally dump it.
I understand that. How much recycling do we expect to have, say, in FY11 citywide? COMMISSIONER TOLSON: I believe 182 3/17/10 - WHOLE - BILL 100118, etc. our number is percent. 3
We've 4 budgeted for 25 percent of our waste 5 stream to be recycling? 6 COMMISSIONER TOLSON: Yes. 7
Okay. On a 8 citywide basis? 9 COMMISSIONER TOLSON: Citywide 10 basis, yes. 11
And how much 12 did that save us? 13 COMMISSIONER TOLSON: If you 14 looked at 125,000 tons times 65. So let 15 me get my calculator out. One second, 16 Councilman. 17
No problem. 18 COMMISSIONER TOLSON: Why don't 19 I just get a pencil out. 20 Eight point three million. 21
Twenty-five 22 percent saves us 8.3 million? 23 COMMISSIONER TOLSON: Yes. 24
So 40 25 percent of that is 3 million roughly. So 183 3/17/10 - WHOLE - BILL 100118, etc. for each -- COMMISSIONER TOLSON: About 3.3.
For each five percent increase in additional recycling, we can expect 3 million more dollars to hit our bottom line? COMMISSIONER TOLSON: Yes.
So can you please provide, by the time of your departmental testimony, an estimate of how much recycling would increase if we went as a pay-as-you-throw and what the additional savings would be in your opinion? COMMISSIONER TOLSON: Yes.
Thank you. Thank you all very much. If you all would remain, please, so if there are any questions that have to be answered, you'll make yourself available.
I'm sorry, 184 3/17/10 - WHOLE - BILL 100118, etc. Madam President. I thought there was somebody else. I'm not finished.
Oh, okay. And I would just like to remind my colleagues we are going to have public testimony immediately after Councilman Green finishes his line of questioning. It is my understanding that we have approximately 40 witnesses to testify. Councilman Green.
Thank you, Madam Chair. So the people -- I think we just heard testimony that the people who are going to pay the business privilege tax increase of $77 million is the wholesale and retail trade. That's who will pay it, the people who sell the product. Can you tell me what the current wholesale and retail combined gross receipts tax is?
I don't have that at my fingertips. I'm happy to 185 3/17/10 - WHOLE - BILL 100118, etc. provide that through the Chair.
It's $47 million in 2007. So what percentage increase in business privilege tax is an additional $77 million on the retail and wholesale trade?
I'll take a moment to calculate it, but I'm sure you're going to tell me.
Well, I didn't actually do the calculation, but it seems to me like it's almost a hundred percent, especially if you use Rudd figures or higher figures. So you've essentially -- it's 200 percent. I'm sorry. So based on your years of experience, what happens to an industry when they have a 200 percent increase in taxes?
I think it depends on the substitution effects associated with beverages. 186 3/17/10 - WHOLE - BILL 100118, etc.
Well, I mean, there's no question that you expect the revenue to appear. I mean, it's in the Five Year Plan that we'll get at least 77 million a year. So if you're increasing an industry's taxes by 200 percent, wouldn't you expect there to be a loss of jobs in that industry?
I think it depends on the substitution effects associated with beverages.
Okay. Can you tell me -- I think you mentioned that Chicago is the only other city with a sugary drinks tax, major City.
District of Columbia includes it in its sales tax. So as a specific tax just on sugary beverages, yes, that is correct.
Okay. And how much is that? I think you said it was -- how much is that as a percentage of the total sale?
The distributors 187 3/17/10 - WHOLE - BILL 100118, etc. pay three percent on sales of containers and seven percent on syrups in Chicago.
So for a 64-ounce or liter of Coke, how much tax would they pay in Chicago on that product?
So if we say, for instance, a two-liter bottle, which costs the same as a 20-ounce bottle of sugared-sweetened soda, the price is 1.39. So should I do ounces or a 17 two-liter? 18
So on 20 ounces 20 at two cents an ounce for 20 ounces, that would be 40 cents. Forty cents on a 1.40 is somewhere between and 30 percent. 23 Is that right? 24
And on two 188 3/17/10 - WHOLE - BILL 100118, etc. liters, which is 128 ounces, that would be about $2.56 on a 1.39 purchase.