Charges for Services – Double the Boat Mooring Tax

 Revenue: $1.3 million

Currently, the City charges a boat mooring tax of seven percent of the mooring or docking fee for any boats docked within the City limits.[1]  Most of the City’s docks are owned by the Chicago Park District, which operates nine harbors that have a combined capacity of 5,000 boats.

Under this option, the City would double the boat mooring tax to achieve a rate of 14 percent.  The seven percent tax yielded $1.31 million in 2008, $1.36 million in 2009, and $1.32 million in 2010.[2]  Assuming that there is not a decrease in dockings in response to the tax increase, doubling the tax rate would yield a $1.3 million increase in annual revenue.

Proponents might argue that this is likely a tax on more affluent City residents and non-residents who have a greater ability to pay taxes, as boat owners are likely to be wealthier than the average City resident.

 

 

Opponents might argue that increasing the tax could make City harbors less attractive and drive boat owners elsewhere, either to harbors in neighboring suburbs or states.

 

 

 

 

Discussion and Additional Questions

One of the key questions in determining the rate of the boat mooring tax is to determine whether or not the mooring price (including the tax) is currently optimal.  Meaning is the price accurately pegged to the demand for boat mooring. If the price were too low, the result would likely be long waiting lists for most of the harbors.  Conversely, if the price were too high, then the harbors would have high vacancy rates.  Some additional questions to answer include:

  • What are the trends in waiting lists for the harbors over the last several years?
  • Do boat owners have other options for harboring their boats?

Budget Details

Fund: Corporate Fund, 0100 Type of Revenue: Boat Mooring Tax
The appropriation is located on page 16 of the 2011 Annual Appropriation Ordinance.

http://www.cityofchicago.org/content/dam/city/depts/obm/supp_info/2011BudgetOrdinance.pdf

 


[1] City of Chicago. Department of Revenue. “Boat Mooring Tax.”

http://www.cityofchicago.org/city/en/depts/rev/supp_info/tax_list/boat_mooring_tax.html

[2] Sources: Financial Management and Purchasing System and

City of Chicago. “2011 Overview and Revenue Estimates.” pg. 108.

http://www.cityofchicago.org/content/dam/city/depts/obm/supp_info/2011_Overview_and_Revenue_Estimates.pdf