121 CRMA Report – November 2017

In this issue:


More about CRMA

Chicago Budget Wrap-Up

Both the Chicago City Council and the Cook County Board passed their 2018 budgets last week with Chicago issuing a new round of taxes, fees and along with highlighting some savings and with the County swapping its controversial sweetened beverage tax for cuts in employee headcount.

After the last few years of implementing significant tax increases, the Chicago City Council balanced its budget with the last round of the property tax increase, another round of the water/sewer tax increase, an increased rideshare tax, increased taxes on cell phones and land lines, increased taxes for large entertainment venues, increased change of officer fees for liquor licensees and increased restaurant licensing fees. The restaurant licensing fees are being increased to help accommodate the hiring of more inspectors. As noted before in this publication, the city was under tremendous pressure to ensure that high-risk establishments were being inspected at least once per year. Increasing headcount will allow them more opportunity to focus on annual inspections. The increased phone taxes will be used to upgrade the city’s 911 system and allow money to be diverted to help make additional payments to the Laborers Pension Fund. The increased property taxes and water/sewer taxes will go do make additional payments to the police and fire pensions and the municipal employees’ pension respectively.

The $8.6 billion budget passed without much fanfare in comparison to the previous two budgets that carried a much heavier tax burden. That said, the budget is being criticized for not addressing Chicago’s long-term structural deficit which some in the economics community have warned will necessitate higher taxes in the very near future. Compounding that concern is the fact that the next municipal election will take place in 2019, so it is unlikely that we will see significant tax increases prior to that time.

The budget passed with a vote of 47-3 with the dissenting votes cast by Aldermen Arena, Ramirez-Rosa and Waguespack who all had concerns about how the tax and fee increases would affect families that have working heads of household. Moreover, they were concerned about part of the money raised from the rideshare tax going to the Chicago Transit Authority for system improvements and sending surplus Tax Increment Financing money to the Chicago Public School system. The Chicago City Council has no oversight of either agency and therefore, the dissent argues that there is no way for them to ensure that the money shifted to those agencies will be used for their intended purpose and will not be mismanaged. Mayor Emanuel sees this budget as taking another step towards putting public pensions on the road to solvency considering the financial condition the city was in when he first took office in 2011. The new budget takes effect on January 1st.

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Cook County Produces a Balanced Budget With No New Taxes

After balancing a portion of its 2017 budget with a controversial tax on sweetened beverages (SBT) and promising that the revenue from that tax would account for a significant portion of the 2018 and 2019 budgets, President Preckwinkle and the Cook County Board knew they had a serious problem on their hands when, in a 15-2 vote, the SBT was repealed. The County’s Finance Department estimated that the expected revenue for 2018 from the SBT would bring in $200 million. After Cook County residents told Commissioners unequivocally that they were in no mood for more taxes, and with the entire Board up for election in 2018, President Preckwinkle and the Board rolled up their collective sleeves and proceeded with the very difficult business of making tough but necessary cuts.

When the dust settled, just over 300 Cook County employees, mostly within the control of the Office of the Chief Judge and the Office of the Sheriff, will lose their positions by the end of the year. In addition, hundreds of unfilled but budgeted positions were taken off the rolls. Originally, President Preckwinkle asked each department to make an 11% across the board cut, but a number of departments claimed that they were either unable or unwilling to make such cuts. Therefore, much of the cutting was left up to President Preckwinkle herself after considering some persistent internal lobbying and last-minute adjustments. There will be increased furlough days for employees who will continue working into the new budget. The cuts will affect both union and non-union positions, both frontline employees and support staff. Many cuts involved middle managers that oversee a small amount of employees.

After all of the talk of how the SBT was necessary to keep the County afloat, the County proved that instead, cuts could be made. It is our hope that for future budgets the County will take a closer look at ways to operate more efficiently instead of supporting knee-jerk, regressive taxes that anger voters and put jobs in the retail, manufacturing and distribution industries at risk. We are pleased with the County’s choice to listen to the residents and cut instead of tax. The SBT will officially be repealed on Friday, December 1, 2017.

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Sponsor: Mayor Rahm Emanuel

Committee: Health and Environmental Protection

The Department of Public Health has issued this proposal in order to bring its Code in line with the state’s Code. For some time now, the state has been involved in a process of making changes that would have much of its health Code mirror the federal Model Food Code. Since the city of Chicago separately inspects food establishments, it was imperative to bring all of the Codes in line so that proprietors could have a better understanding of what is expected of them to successfully run a food establishment in the state. As a part of this process, the department is developing a rulemaking process where, before a rule is promulgated, there will be an opportunity for members of the public to comment. The Commissioner will publish the notice of rulemaking in a local newspaper or, in the case where written comments will be allowed, will send an email notification to all who sign up with her office. Once a notice is issued, comments will be allowed for 30 days. We should note that the language for many sections has been deleted so that much of the food Code can be accomplished by rule.

There would need to be a person who holds a Food Service Sanitation Manager’s Certification (FSSMC) on duty at all times that food is being prepared and that person must be designated as the person in char. A number of the definitions in the Code have now been changed to fully align with the Model Food Code, and other definitions have been added. Dog-friendly areas have now become “animal” friendly areas to accommodate for the expanded definition of service animals, although it is still lawful to have a dog-friendly area that is limited to dogs only. It will be unlawful to deny a person a right of entry into a retail food establishment if they are accompanied by their service animal in accordance with the federal Americans with Disabilities Act. The sections on vegetables, fruits and berries as well as candy, the manufacture of bottled water and non-alcoholic drinks, frozen desserts and mixes, milk and milk products are deleted in their entirety.

There are several sections regulating “unwholesome” food, but there is no accompanying definition. Lastly, the FSSMC certification fee is increased from $35 to $45.

We encourage you to please read this proposal in its entirety as it has been many years since the department has attempted a revision of this magnitude. Please also review this breakdown of many of the changes issued by the department. We need to hear from you regarding any questions or concerns you may have about this proposal.




Sponsor: Mayor Rahm Emanuel

EFFECTIVE DATE: January 1, 2018

The annual Management Ordinance is issued in conjunction with the city’s budget process. It makes changes to several areas of the Municipal Code, some of which can include fee increases.


Building Code Re-inspection Fees

If the department has to come out and re-inspect in order to approve a permit or for license compliance purposes, businesses will be charged for the re-inspection. Previously, businesses were not charged for the initial or for a re-inspection. They were only charged if, after either failing the re-inspection or not being ready for the re-inspection at all, the department had to come out a third time. The amount of the fee will be determined by the costs to the department to do the subsequent inspection. Businesses will also be charged if the scheduled inspection is cancelled less than 24 hours in advance or if the work performed was contrary to the work identified on the application. There are limited exceptions.

Sign Permits

It shall be the duty of any entity that offers advertisement space or who advertises on any sign to ensure that the sign has a valid permit issued by the department. Any changes to signs that are different from the information provided on the application for the permit must be submitted to the department within 10 days of the change, including for signs whose permits were issued on or before May 19, 2012. This section also lays out the conditions under which a sign permit can be revoked. All off-premise signs must display their permit numbers issued by the department. Abandoned signs and sign structures have been given more robust definitions. Abandonment of signs must be reported to the department and removed within 30 days of the report. Owners, lessees and other persons in control of signs that are removed by the department will be held jointly and severally liable for all expenses related to removal. Tents and canopies must be erected by a general contractor.


Sponsor: Mayor Rahm Emanuel

EFFECTIVE DATE: January 1, 2018

Amusement Tax

The city currently imposes a tax on patrons of amusements at the rates of 5% for live theatrical, musical or cultural performances in spaces with a capacity of more than 750 persons. That tax will now increase to 9% for such performances that occur in a space with a maximum capacity of more than 1500 persons. The tax will affect theatre goers at Chicago’s largest theatres which would include performances of Hamilton and sporting events at Wrigley Field, Soldier Field, the United Center and Guaranteed Rate Field. The proposal would remove the tax for smaller venues and not-for-profit venues would remain untaxed. IRMA joined with other business groups, the large theatres and sports/concert venues in opposition to the tax which would have a residual effect on retail and restaurants as large events bypass Chicago for locations in St. Louis, Milwaukee or even the suburbs, but the tax will go into effect as proposed.

911 Surcharge

The 911 surcharge on cell phones and land lines will increase from the current $3.90 to a monthly rate of $5.00. The tax, which is expected to net approximately $27 million, will largely be used for upgrades to Chicago’s 911 center. The ability to increase the tax was granted to the city in a telecommunications bill that passed through the state legislature this year and was signed by the Governor. If an increase in this tax sounds familiar, that’s because the City Council voted to increase the fee to its current amount two years ago.

Change of Officer Fee

Any change of officer for a license granted under the city’s general licensing provisions will illicit an increased fee to the city. The filing fee for notice of the change will increase from $40 to $250 with a slightly decreased fee for any additional persons requiring a background check. For those persons wishing to file a change of officer notice and not requiring a background check, the fee will increase from $20 to $100. If the change of officer is for a liquor licensee, then the fee goes from $100 to $500 if the officer has no ownership interest or owns less than 5% of the business. If the officer owns 5% or more, then the fee increases from $250 to $2000.

Tobacco Licensing Fee

Tobacco licenses are scheduled to go from a two-year license to a one-year license. Therefore, the current fees are cut in half as they will now be paid on an annual basis. There is no overall increase or decrease in the fees.

Food Inspection Fees and Fines

The city is tasked with annual inspections for high-risk establishments (restaurants), but has not had a great track record of getting all of the inspections completed in a timely manner. In fact, many restaurants were not being inspected annually. In order to correct the problem, the city will hire additional inspectors to handle the load, and therefore will need to pay for them. Therefore, it will increase restaurant licensing fees according to the following schedule:

Less than 1000 sq. ft. = remains at $660

1001-2500 sq. ft. = increase from $880 to $940

2501-4500 sq. ft. = increase from $1100 to $1110

4501-10,000 sq. ft. = increase from $1100 to $1320

Over 10,000 sq. ft. = increase from $1100 to $1650

Food Establishment Re-inspection Fees

Any re-inspection that addresses a violation previously identified by the department will be charged at a fee of $100 instead of the current $50.


Sponsor: Mayor Rahm Emanuel

EFFECTIVE DATE: January 1, 2018

This is the next previously scheduled increase in property taxes. As a part of the 2016 budget, the City Council voted to implement the largest increase in property taxes in Chicago’s history over a period of 4 years beginning in 2015. 2018 is the final year of increases. The increase should net $63 million.



Sponsor: Mayor Rahm Emanuel

EFFECTIVE DATE: June 3, 2018

Chicago will establish its own energy performance rating system for covered buildings which assigns stars based on performance. Water usage information would be made readily available to the public. A four star rating would be the highest and zero being the lowest. Buildings would be provided their rating on an annual basis and must disclose their score in any advertisement to sell the building as well as display the score on the outside of or directly inside the building so that it is visible to visitors. This ordinance will not require businesses to collect any information not already being collected, the city just wants to maintain its own rating system. We should note that the star rating system does not necessarily follow a federal model, so in order to appropriately determine the meaning of the number of star awarded, a person must become familiar with Chicago’s exclusive system. There are a few exceptions.



Sponsor: Alderman Patrick O’Connor (40th Ward) 

In advance of the General Primary election scheduled to take place on March 20, 2018, the Mayor’s office put forth three ballot questions for consideration by city residents. The questions are usually, but not always, non-controversial and the vote is informative, but not binding. This year the topics for the questions cover the banning of bump stocks in response to the mass shooting in Las Vegas, the protection of residents currently relying on the ACA to provide them with medical coverage to ensure that the ACA is not rolled back, and developing a comprehensive statewide strategy to address the opioid crisis. As pharmacies play an important role along the healthcare continuum, we find the ballot question on the opioid issue of particular interest to our pharmacy members. All three questions passed and will appear on the March ballot.

Both the Cook County Board and the Chicago City Council meetings are scheduled for 

Wednesday, December 13, 2017.

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Tanya TricheTanya Triche Dawood
Vice President, General Counsel
Illinois Retail Merchants Association