Chicago passes largest property-tax hike in modern city history

Chicago passes largest property-tax hike in modern city history

Mayor Rahm Emanuel and city aldermen choose tax hikes over necessary reform.

Chicago City Council passed the largest property-tax hike in modern city history by a vote of 36-14 on Oct. 28, approving Mayor Rahm Emanuel’s 2016 budget proposal.

The budget includes a $588 million property-tax increase, new fees on ridesharing services such as Uber and Lyft, and a new garbage-collection fee.

When fully phased in, the mayor’s plan will hit Chicagoans with more than $700 million a year in new taxes and fees.

On the floor of City Council, various aldermen described the vote as “the toughest decision” and “bitter medicine,” and blamed the profligate spending habits of former Mayor Richard Daley. Others scolded Emanuel for not hiking taxes enough.

Still others cited the fact that some residents of Chicago’s collar counties pay far higher property taxes than Chicagoans. This is a dishonest comparison.

The city’s collar counties levy some of the highest property taxes in the nation. Chicago’s property-tax rates rank among the highest in major U.S. cities. Residential rates are 10th highest, while commercial property taxes are the third highest among 53 of the country’s major cities.

A better measure is the city’s overall cost of living. When all other taxes and fees are considered, Chicagoans already pay far more in taxes and fees per person than residents of every other major city in Illinois.

Perhaps the most disheartening fact about Emanuel’s tax and fee hikes is that they don’t even come close to fixing the enormous budget deficit facing Chicago Public Schools and its nearly $10 billion pension shortfall. If the Oct. 28 budget vote was any indication, Chicagoans can expect to have their wallets raided once again to paper over this massive problem.

The budget also relies on $800 million in state money that is by no means guaranteed.

Instead of opening up city contracts for renegotiation, right-sizing government-worker payrolls, removing barriers to jobs growth in a declining city economy, or giving true security to new city workers in the form of 401(k)-style retirement plans, Chicago City Council simply did more of the same.

The message to struggling city residents? It will never be enough.

Before the tax hike, Chicago government already took in more money per person than any major city in Illinois by a vast margin. And city revenue has grown much faster than inflation over the last 20 years.

In the end, it will be Chicago’s poor and disadvantaged who are hurt by continual stopgap fixes to structural budget problems. Hitting up a flatlining city population for more and more money can only work for so long. If politicians offer nothing more than to bail water from Chicago’s sinking financial ship, the city will drown.

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