October 07, 2022
The Cook County Board of Commissioners voted unanimously on September 22, 2022 to repeal the Wheel Tax as of June 30, 2023. The Wheel Tax is an annual license fee authorizing the use of any motor vehicle within the unincorporated areas of Cook County. Areas of Cook County that are unincorporated are not part of a municipality and therefore municipal services to those areas, such as policing and building and zoning, are provided by the County. The Wheel Tax is collected from residents of unincorporated Cook County and is similar to vehicle registration fees or “city stickers” imposed by many municipalities[1] across the County.
During the discussion of the ordinance by Commissioners, the lead sponsor said the main reason for the repeal was to improve equity for low income people who live in the unincorporated areas of the County. The discussion cited a 2021 study by the Chicago Metropolitan Agency for Planning (CMAP) that made recommendations for improving equity in transportation fees. The recommendations included reducing the cost of vehicle registration fees. CMAP submitted a letter saying the organization “supports action to reduce the financial burden of transportation revenues on underserved and disadvantaged residents in Cook County.”
An additional argument in favor of eliminating the Wheel Tax was that it would put the County in line with other municipalities in the region, such as Hoffman Estates, Schaumburg, Elk Grove Village, Barrington Hills, Rolling Meadows and Streamwood, which have repealed their vehicle sticker fees. Some of these municipalities cited the relatively high cost of administering a vehicle registration tax, compared to the revenue generated, as a major reason for repealing the tax. The Cook County Bureau of Finance estimates that 8,000 staff hours are required to administer the Wheel Tax, and during the discussion of the ordinance, the cost of administration was estimated at $500,000. The Wheel Tax was projected to generate $4.5 million in FY2022. The sponsor said the 8,000 staff hours previously used to administer the Wheel Tax would be used elsewhere and the loss of revenue would be offset by other county revenues.
Over the years, the unincorporated areas of Cook County have been a subject of analysis by then-Cook County Commissioner Mike Quigley in his Reinventing Cook County reports; a Task Force created by Cook County Board President Toni Preckwinkle, which recommended their eventual elimination; and a series of reports by the Civic Federation. CMAP partnered with Cook County to develop an unincorporated area plan for Maine and Northfield Townships.
The Federation’s analysis of the unincorporated areas found that the Wheel Tax is one of the few sources of revenue generated in unincorporated areas that offset the cost of the County providing municipal services to approximately 126,034[2] unincorporated residents. The report found that in FY2014, the revenues generated within the unincorporated areas from state income tax distributions, the Wheel Tax, building and zoning fees, the local portion of state sales tax distribution and other fees generated a total of $24 million. In comparison, the cost of providing police, building and zoning, animal control and liquor control services totaled approximately $42.9 million. Property taxes paid by unincorporated residents to the county are used to fund countywide operations, just like those of other residents who live in municipalities, and therefore do not help offset the cost of unincorporated municipal-type services.
Eliminating the wheel tax will further widen the gap between revenues generated in the unincorporated areas and the expense of providing services to them. In effect, this increases Countywide taxpayers’ subsidy to these areas.
[1] The Chicago Metropolitan Agency for Planning in 2021 noted that 159 municipalities in northeastern Illinois impose vehicle registration fees on residents and that the fee amount ranges from $5 to $90.
[2] Population estimate as of 2010. See Civic Federation, “Unincorporated Cook County: A Profile of Unincorporated Areas in Cook County and Recommendations to Facilitate Incorporation,” September 22, 2016, p. 45-46. Available at https://www.civicfed.org/civic-federation/publications/UnincorporatedCookCounty2016.