One Love Massive Essential News And Views — 8/19/16 — Why Chicago’s Small Venue Taxes Affect #newDC



Marcus K. Dowling

If wanting to see what Washington, DC’s urban renewal plans look like on a macro-sized scale, look no further than Chicago, Illinois. In noting that Cook County, Illinois is now actively attempting to collect back taxes from smaller venues, arguing their bookings don’t count as live music or culture, let’s understand something that could be happening here in DC soon as well.

Chicago is 3.5 times larger than the Nation’s Capital, but intriguingly, as compared to the Nation’s Capital, Chicago’s budget is roughly $8 billion, as compared to $13 billion for #newDC. Chicago’s been in the big budget business for some time now, but has recently been defaulting against said budgets. In July 2016, the Chicago Tribune reported the following:

A shortfall of $137.6 million is expected in next year’s estimated $3.7 billion corporate budget, which is used to cover day-to-day expenses, according to the city’s Annual Financial Analysis released Friday. That would be the lowest shortfall since 2007, before the Great Recession started taking its toll on city finances.

Continuing, the article notes the following:

Since taking office in 2011, Mayor Rahm Emanuel has significantly reduced the city’s reliance on one-time revenues by cutting costs and enacting a smorgasbord of new taxes, fines and fees. Those efforts, coupled with an improving economy, have significantly reduced the budget shortfall, which topped $630 million his first year in office.

The fascinating thing about DJ parties and less-than-mainstream events happening in Chicago these days is that Cook County doesn’t legally classify them as culturally enriching, which means that they’re not exempt from being taxed. The Chicago Reader notes that, “[c]ounty code defines live musical and cultural performances as ‘any of the disciplines which are commonly regarded as part of the fine arts, such as live theater, music, opera, drama, comedy, ballet, modern or traditional dance, and book or poetry readings.'” Thus, there’s a precedent that a live DJ set that’s not in a venue where say, tourists can spend hundreds-to-thousands of dollars doesn’t deserve to be taxed. When Bruce Finkelman, the owner of the company that owns noted Chicago indie venue Beauty Bar calls the tax grab by Cook County “offensive,” he’s barely scratching the surface.

In #newDC, we’re not likely to be running into budget shortfalls anytime soon. HOWEVER, we are likely, as a city, going to be looking into ways of developing a “war chest” of sorts to ensure that we can handle any potential issues with debt. Does that look like collecting more taxes on indie venues? Already, DC’s revenues on alcohol sales alone have increased 150% in the past 15 years, with¬†$2.8 billion in revenue added to the D.C. economy in direct sales alone in 2015. But, when DC’s budget being set at $13 billion and likely to rise past that number in the future, there’s probably 13 billion reasons to push what appears on the surface to be massive revenue from taxable nightlife to a MUCH greater level in order to create a guard against any potential “bubble burst” in real estate, tourism or the surging tech sector.

What’s happening in Chicago is appalling. By comparison, what could happen in DC will just be seen as the price of doing very, very, very big business.

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