Legislator pushes back on higher hotel taxes as part of Chicago tourism plan
(The Center Square) – Illinois state Rep. Dan Ugaste doesn't see the value in a new hotel tax now being proposed by Chicago tourism officials.
As part of Choose Chicago's vision, the city's hotel tax, already the highest in the country among convention cities, could jump to 18.9% at downtown venues. The so-called Tourism District Plan looks to add an extra 1.5% surcharge on room rates for stays at loop hotels with at least 100 rooms.
"I think even if the Tourism Bureau needs more money they need to find it out of existing funds," Ugaste told The Center Square. "We can't keep increasing prices on things. It's chasing everyone away. Chicago has always been a great destination for tourism and conventions and we just aren't getting what we used to because of how much it costs to come here."
Even with the city's $29 million annual budget being roughly just half of what some rival cities allocate for such promotions, Ugaste argues more taxes and higher fees are not the solution.
"Unfortunately, the party in power in this state always thinks the answer to everything is to throw more money at it," he added. "Right now, the answer seems to me to be the exact opposite. We need to look to see how we can decrease taxes and costs so that people will come here."
Data shows almost 52 million people visited Chicago in 2023, or almost nine million fewer visitors than the number that traveled to the city during 2019's record year, prompting Ugaste to stress the city's problems run much deeper than just budget issues.
"We're running into big problems; they're talking about a transit funding cliff," he said. "Well, it's because no one's commuting to the city because of the crime problem. We have businesses and people leaving Illinois and now we're facing a three-billion-plus dollar budget deficit. It's just going to keep compounding itself until we finally address these problems."
Ugaste said the whole state pays the price when the city falls short of being what it should be.
"Chicago is what makes the northeast corner of the state thrive and if Chicago is not doing well the rest of the area is going to start having the same problems and declining too," he said. "We're all dependent on each other and Chicago has always been the economic driver. I just believe they're taking the wrong approach because they're not listening to anyone on our side and they're not looking at what they've tried in the past and what has and hasn't worked."
Choose Chicago officials say revenue generated from the new tax would also be used to cover incentives and "bid fees" in attracting more large-scale events such as the Democratic National Convention to the city. The tax increase could mean as much as an added $50 million in annual revenues for the city's promotional budget.
