Mayor Rahm Emanuel is coming under fire for his proposed plan to fix the pension problem with a property tax increase.
Chicago homeowners are poised to take a financial hit that would cost hundreds of dollars.
If the mayor’s pension reform plan is approved by state lawmakers, the governor and local aldermen, the city’s share of property would increase over 30 percent by the year 2020.
This is a giant tax hike,” said Illinois Policy Institute Director John Tillman.
Tillman says Chicago Mayor Rahm Emanuel has understated the size of the property tax increase that the mayor has proposed to stabilize two of the city’s four underfunded pension systems.
“The mayor hasn’t done a very good job of selling this, to be frank about it,” Tillman said. “He should have come right out with the truth about how big a tax hike this is.”
According to the Cook County Clerk, the city’s share of property taxes on a $250,000 Chicago house, which the Emanuel administration uses as an example, is about $900 a year.
For such a home, the mayor’s proposed pension levy would increase gradually, $58 a year for five years beginning in 2016.
By 2020, the total additional tax would amount to $290, a percentage increase of just over 32 percent that will apply to all residential real estate in the city.
“We’re talking about almost a one-third property tax increase to solve just a small slice of the overall problem,” said Tillman.
Concerns about the actual size of the tax increase has slowed enabling legislation in Springfield. And Thursday Governor Pat Quinn, hose budget plan recommends property tax relief for homeowners, was noncommittal when asked if he would sign a Chicago pension bill that included higher property taxes.
“When they have something put together we’ll look at it but I want to make it clear my belief in reducing the burden of property taxes in our state,” Quinn said.
Last year, the mayor warned that without pension reform, the city property tax might go up as much as 150 percent, but his proposed reforms include increased worker contributions and retiree benefit reductions. That apparently has prevented the taxpayer from taking an bigger hit.
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