Transportation Taxes – Eliminate Reduced Rate City Sticker for Seniors

Savings: $7.6 million

The City charges a vehicle tax, in the form of a vehicle sticker required to be displayed in vehicle windshields, on “vehicles that are principally garaged in the city more than 30 days.”[1]  In 2011, this tax was projected to raise over $104 million.[2]  The standard annual fee for vehicle stickers is $75, with increased fees for larger vehicles.  Seniors, defined as over 65, pay a reduced fee of $30, but this can only be applied to one vehicle.[3]

Under this option, the City would eliminate the reduced sticker price for seniors.  The City currently sells approximately 1.3 million stickers annually.[4]  As of the 2010 census, of the 2.14 million people living in Chicago over the age of 16 (and thus eligible to drive), 13 percent (277,932 people) were seniors.[5]  Assuming that the share of vehicle stickers bought by seniors is the same as the proportion of seniors living in the City, approximately 168,000 vehicle stickers were purchased by seniors.  Increasing the fee of these 168,000 stickers from $30 to $75 would raise $7.56 million annually.

Proponents might argue that it is unfair to provide seniors with this benefit and not other residents.  Of all age groups nationally and in Illinois, seniors are the least likely to be in poverty.[6]  Thus, a proponent might argue that they are least in need of this assistance. Opponents might argue that seniors often live on fixed-incomes and cannot afford to pay an increased vehicle tax.

 

Discussion and Additional Questions

For simplicity, to estimate the revenue generated by this option, we ignored the fact that some seniors may already be paying regular sticker prices because they have more than one vehicle.  To the extent that this is occurring, this would reduce the potential revenue that this option would generate.  On the other hand, we have also ignored that seniors who own large passenger vehicles, defined as 4,500 pounds or more, receive a larger fee reduction, as the regular sticker price for these vehicles is $120.[7]  Therefore, some additional questions to consider when deciding whether or not to implement this option might include:

  • How many reduced fee City stickers were sold in each of the last three years?
  • How many reduced fee City stickers were for large passenger vehicles?

 Budget Details

Fund: Vehicle Fund, 0300 Type of Revenue: Vehicle Tax
The appropriation is located on page 19 of the 2011 Annual Appropriation Ordinance.

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


 

 


[1] City of Chicago. Office of the City Clerk. “Vehicle Stickers”. http://www.chicityclerk.com/licenses/citystickers.html

[2] City of Chicago. “2011 Annual Appropriation Ordinance.” pg. 19

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

[3] City of Chicago. Municipal Code. Section 3-56-050

[4] City of Chicago. Office of the City Clerk. “City Clerk’s Office Now Accepting Entries for the 2012 – 2013 Vehicle Sticker Art Contest.” September 15, 2011.

http://www.chicityclerk.com/news_articles/2011/sept/Art_Contest_OpenSept2011.pdf

[5] U.S. Census Bureau. 2010 Census. Geography: Chicago (city). Population: Tenure, Household Size, and Age of Householder.

http://factfinder2.census.gov/faces/nav/jsf/pages/index.xhtml

[6] Kaiser Family Foundation. “Poverty Rate by Age.” Statistics are as of 2008.

http://www.statehealthfacts.org/comparebar.jsp?ind=10&cat=1

[7] City of Chicago. Office of the City Clerk. “Vehicle Sticker Pricing.”

http://www.chicityclerk.com/licenses/VehicleStickerPricing.pdf