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* As we’ve discussed before, Chicago biz groups are against this idea because it shifts a major burden to them…
An aide to Mayor Rahm Emanuel is testifying before state lawmakers on a proposed property tax exemption as Chicago looks to increase property taxes to help pay pensions.
Deputy Mayor Steven Koch told legislators Thursday that the city wants to protect residents whose homes are worth $250,000 or less and Chicago’s downtown business core will absorb much of the burden.
Emanuel has called for a $543 million property tax over next four years. But he needs sign off from Springfield on an exemption. Democratic legislative leaders say they’re on board, but Gov. Bruce Rauner hasn’t been as receptive.
* The Question: Do you support this concept? Take the poll and then explain your answer in comments, please.
posted by Rich Miller
Thursday, Sep 24, 15 @ 11:58 am
Sorry, comments are closed at this time.
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not enough has been done to streamline government and cut spending while raising taxes. There should be a both revenues and cuts, there are not the budget is more than last year. They have talked about privatizing 311 and other services. This will save pension dollars on these employees who are not state workers
Comment by Shoedoctor Thursday, Sep 24, 15 @ 12:01 pm
“the city wants to protect residents whose homes are worth $250,000 or less”
I voted ‘No’ only because I think it should be lowered to ‘$150,000 or less’.
Comment by Mama Thursday, Sep 24, 15 @ 12:04 pm
I may not understand the concept, but it seems odd to me that homes under $250k will be exempt while homes at $250,001 will not.
Comment by Chicago Guy Thursday, Sep 24, 15 @ 12:11 pm
Of course Dems are on board
Comment by anon Thursday, Sep 24, 15 @ 12:12 pm
I disagree Mama. I think 250,000 is about right. 150,000 is too low and would effect lower middle income folks. Around the Metro East you could get a nice home for 150k. Not in Chicago. 250k seems like a better number. (obviously I haven’t run any economic impact numbers to support it though) I’m not the stats person in the family.
Comment by Honeybear Thursday, Sep 24, 15 @ 12:12 pm
Yes.
“Chicago’s downtown business core” has had a very sweet deal for a very long time.
– MrJM
Comment by @MisterJayEm Thursday, Sep 24, 15 @ 12:13 pm
Voted yes for the general concept, although the more description concept should be more of a sliding scale.
Comment by Sick & Tired Thursday, Sep 24, 15 @ 12:13 pm
Already a huge, huge shift with classification system; this essentially makes business solely responsible for a citywide problem, and added to all the other business costs brings Chicago to a “tipping point” for employers staying away and even leaving. Absolutely devastating to the small businesses in the neighborhoods — their departure will hurt communities and home values. This is part of Chicago’s unfortunate political culture of free lunch, kicking cans, and having somebody else pay, as if there were magic answers without pain for all to share. Hopefully the rhetoric won’t become demonizing of business, with false suggestions that they don’t pay their fair share now.
Comment by Anon Thursday, Sep 24, 15 @ 12:14 pm
Correction: Voted yes for the general concept, although the more descriptive concept should be based on a sliding scale.
Comment by Sick & Tired Thursday, Sep 24, 15 @ 12:16 pm
I voted no. I’d rather see expanded exemptions based on ability to pay rather than property value–that’s better policy. The Chicago progressive aldermanic caucus has the better idea. The Mayor’s proposal is more concerned with keeping things simple for government workers who have to process the applications than targeting relief to the neediest.
Comment by James Thursday, Sep 24, 15 @ 12:16 pm
Yes only because the suburbs need more skin in the game with Chicago and this is one way to do it. It’s not a good way, but it’s a way.
Comment by From the 'Dale to HP Thursday, Sep 24, 15 @ 12:19 pm
1. Commercial properties in Cook County already shoulder a disproportionate share of the tax burden — this is unique to Cook County and not the rest of the state. This plan would make the disproportion even greater.
2. This would shift burden to those with homes greater than $250,000. And it’s not like those with $300,000 homes are raking in the dough.
3. Apartment owners in poor areas would be hit, and they would try to pass off the greater costs to their tenants. So this plan will simply protect those that own or live in single-family homes worth less than $250,000 while targeting poor people in apartment buildings.
3. There would be little incentive for those that hover around the $250,000 value to maintain and try to improve the value of their homes. The incentive would be to try to keep one’s home values below $250,000.
4. So someone’s home that is valued at $250,001 must pay a significantly greater tax burden than a home valued at $249,999?
5. Property owners on the margin are going to fighting the assessor tooth and nail to get and keep their home values below $250,000.
This is a horrible idea!
Comment by Just Observing Thursday, Sep 24, 15 @ 12:19 pm
My 89 (almost 90) year old mother has lived in her home for over 65 years and on paper it is worth around 500,000 to 700,000.
She has no assets as she had to raise 12 kids after her husband died and we went for years just barely surviving. She never asked for any handouts and she never received any help from anybody either in the Government or private Charity. She has always been proud of paying her own way.
We help her out as much as we can but none of us are rich.
We all contribute to a care giver to help us take care of her as she needs the help and we all have families to take care of besides her.
All she asks for is to stay at her home and not be “warehoused” to wait to died in a nursing home. It is the least we can do for her.
The new taxes will hurt all of us and it is a strain on my mother. We take care of her finances as she has only a small social security check which isn’t nearly enough to take care of her monthly bills so we all contribute to pay for her bills which are expensive with the caregiver. If it wasn’t for the medical bills, she would still never taken a dime from anybody including family but she needs the help so we insist.
All we ask is that she get her wish to stay at her home. She doesn’t want to move, period.
Comment by Anonymous Thursday, Sep 24, 15 @ 12:19 pm
Absolutely not. Home values of $250K or less according to whom? The assessor or the market? I just learned, to my great dismay, that sales prices are now factored in to assessments in Chicago. Which means my taxes are about to triple. Yet my neighbor, who has the same house but bought it before 2012, will pay a third of what I pay.
Everybody needs to feel the pain of this property tax hike. No one should be spared. We’re all in this together, and if we ever hope to get tax fairness in Chicago, or Illinois, then this tax hike needs to be especially painful to everyone in Chicago.
Mayor Daley had only a handful of what could be called “rebellions” among the Aldermen. Almost everyone was the result of a proposed property tax increase. The result? He didn’t raise them enough, and he spent the pension money instead. Now the bill is due and we all have to pay for the meal. I don’t want to hear any bickering about “my house is only worth XX so I should be protected.” That’s nonsense and only makes sense as Mayor Emanuel tried to count noses in the City Council.
Property taxes have never been based on ability to pay. That’s why they are so hated. But fair is fair, and spreading it evenly is the surest way to make every Chicagoan understand what is going on in this city and how awful the last twenty years have been in terms of financial management in Chicago.
Comment by 47th Ward Thursday, Sep 24, 15 @ 12:22 pm
First off, this is a countywide property tax exemption. It’s not ‘just’ an exemption for properties located within the City of Chicago. It would apply to every property located in Cook County.
This would damage everybody else’s tax base. Lower taxable value = a higher tax rate for everybody else.
So we benefit the City of Chicago by sticking it to all their neighbors?
And realize, it’s not going to be the City of Chicago administering it. This burden would fall on Cook County government (Assessor & Tax Extension) to make it work. I’m sure they’ll be happily saying “Thank you” for the extra work.
If it was me and I didn’t have one of those fancy mansions, first thing I would do is file a tax appeal to try and get below the $250k threshold.
For all those Chicago Democrats who have turf going outside the City of Chicago, might want to think how they are going to respond to their municipal governments (and other tax districts) which aren’t the City of Chicago.
Because expanded property tax exemptions aren’t by tax district, they are for the property. So all the other tax districts take a hit (their tax rates will increase).
Just saying…..
Comment by Judgment Day Thursday, Sep 24, 15 @ 12:31 pm
First off, the increase exemption would apply to all homes in Chicago, not just those worth less than 250k. Its just that the homes worth 250k or less, won’t see an increase in their tax bill. (Homes worth less than 250k will actually see a decline in their tax bill.) The home worth 255k will still get the larger exemption, but will see a small increase in the actual tax bill. A house worth 500k will also get the increased exemption, but will see a significant increase to their tax bill.
That being said, I’m opposed to the proposal. Local governments over rely on property taxes. Chicago has low property taxes compared to everyone else in this state. Sheltering Chicago homeowners from the over reliance on property taxes would make a change in the overall tax system a lot harder. They should see the increase and then hopefully pressure their officials for a tax swap of some sort. (I know politicians have run on it before and lost, but if you want lower property taxes, you have to replace it with something.) Either higher income taxes or sales taxes.
Comment by Button is broke... Thursday, Sep 24, 15 @ 12:34 pm
Yes,
Downtown Chicago is a great place to do business with an educated workforce at a price/sq.ft that can’t be beat. They won’t go anywhere.
Comment by PublicServant Thursday, Sep 24, 15 @ 12:35 pm
- 47th Ward - Thursday, Sep 24, 15 @ 12:22 pm:
Regarding my Mother, we wonder what her house is really worth. We have made repairs but can’t afford major changes which would be nice.
She was going to take out a mortgage to pay for her caregiver but we did not want her to be in a jam so we insisted that she not take on any financial burden.
She should enjoy herself with whatever time she has left which we hope is a long time and what makes her happy is being in her home and having family visit. Unfortunately, most of her friends are past.
There needs to be another way.
When the time comes, the proceeds from the house will not pay for what we all have put into her care but we don’t care. She is our Mother and we love her.
This burden will fall on us to pay the difference along with our own mortgages.
It is crushing.
Comment by Anonymous Thursday, Sep 24, 15 @ 12:40 pm
Everyone needs to feel the pain of a tax increase, it’s the best way to ensure that everyone understands that decisions to offer pension increases, pay increases to state workers, and other increases in spending impacts everyone. I’ve talked to many people in this state who say they the state (or city) needs more money, but oh yeah, I’m taxed too high already someone else needs to pay for this.
Comment by JerryWinters Thursday, Sep 24, 15 @ 12:40 pm
JerryWinters - Thursday, Sep 24, 15 @ 12:40 pm:
Rauner, you need to pay the workers a fair wage for their work. If you don’t, you will lose all of the good ones.
Comment by Anonymous Thursday, Sep 24, 15 @ 12:46 pm
JerryWinters - Thursday, Sep 24, 15 @ 12:40 pm:
Maybe Jerry, Rauner, can take a pay cut so that his business will be more profitable.
Comment by Anonymous Thursday, Sep 24, 15 @ 12:47 pm
===It is crushing.===
It must be, and you sound like a very caring child. She’s lucky to have you. And your family is not alone, there are thousands of seniors on fixed incomes who can’t always afford both food and medicine.
Something has to give. The idea behind the concept of shifting the tax burden is a cynical ploy to get the votes of certain Alderman by promising that some communities won’t get hit as hard as others. That’s the only way to get 26 votes on the biggest property tax increase in Chicago’s history.
We need to come to terms with exactly how bad our finances are before we can come up with a fair solution. The fastest way to do that, unfortunately, may mean that your mother has to sell her house. I wish that wasn’t the case. I wish city officials hadn’t misspent and under-taxed for so long.
But that’s where we are.
Comment by 47th Ward Thursday, Sep 24, 15 @ 12:53 pm
I voted yes because it’s the simplest approach but I’d prefer the exemption based on income rather than worth of the dwelling. There are probably studio or small one bedroom condos in Streeterville that would be exempt.
Comment by Cheryl44 Thursday, Sep 24, 15 @ 1:29 pm
Voted yes with the understanding that they would accomplish this by raising the exemption, thereby making the impact low for people on one side or the other of the $250,000 threshold.
Comment by AC Thursday, Sep 24, 15 @ 1:39 pm
Agree it’s a bad idea. One of the few thriving areas in Illinois is Chicago’s downtown. Commercial buildings are already paying a disproportionate share. Hurts our competitiveness to make this situation worse. Also people who aren’t asked to pay, find it easy to demand more and more services. They don’t feel the pain.
Comment by Midway Gardens Thursday, Sep 24, 15 @ 1:49 pm
yes, what Mr. JM said.
Downtown real estate is hot as a pistol and is largely owned by well-heeled investors in REITs from all over the world. They can do their bit to support the operations of the city where they’re making a sweet payday.
Comment by Wordslinger Thursday, Sep 24, 15 @ 1:52 pm
No. The well-heeled REITs pay no property taxes - it’s a pass through to their tenants, dollar for dollar. Certainly, the tax hike may have less impact on downtown because of its desirability, but neighborhood commercial areas and industrial properties (populated by less well-heeled tenants) will suffer. The googles, Motorolas won’t care about a tax increase. Small businesses will. This will only exacerbate the divide between the downtown and rest of the city.
Comment by Put the fun in unfunded Thursday, Sep 24, 15 @ 2:25 pm
Plus commercial property is already assessed at 2.5 times residential property (thanks 1970 constitution). How much more “progressive” can it get? See http://www.cookcountyassessor.com/forms/classcode.PDF
Comment by Put the fun in unfunded Thursday, Sep 24, 15 @ 2:28 pm
– it’s a pass through to tenants, dollar for dollar.–
Right. Since there’s absolutely no competion for tenants among downtown building owners, they can simply pass along every element of the cost-of-doing business, dollar for dollar, whenever they go up.
Comment by Wordslinger Thursday, Sep 24, 15 @ 2:56 pm
Word is correct, which is one reason why the building owners hate this. It’ll cut into their profits by forcing them to eat some of that tax hike.
There are other reasons, including pricing out some potential renters, but that’s one of them.
Comment by Rich Miller Thursday, Sep 24, 15 @ 2:58 pm
Support the concept, but it will be interesting to see the jockeying to maintain a home worth $245K. Those appraisers are going to become VIPs.
Comment by A guy Thursday, Sep 24, 15 @ 2:58 pm
I voted no. Five years from now we will need another tax increase to cover additional pension contributions resulting from life expectancy advances. Move over Motown, we are coming to join you.
Comment by Blue dog dem Thursday, Sep 24, 15 @ 2:58 pm
The concept works because as the business raise prices to cover the increased costs, people from outside the city will be helping finance the increase.
I would think a deduction in assessed value would be a better way to avoid the difficulties with a home assessed at $255k etc.
Comment by Will P Thursday, Sep 24, 15 @ 3:18 pm
All property tax exemptions are designed to shift the burden to commercial/industrial properties. IMO they are way to low to provide real relief. Higher exemptions the lower the taxes paid by people with low valued property. Larger exemptions would ensure that the residential portion of the property tax is being paid by people who can afford it! As stated earlier commercial owners tenants are already usually responsible for he property taxes through their lease and will pass that increased cost of business to their customers. This is an easy way to assure some sort of property tax relief to those who need it the most. Cook Countys expanded H/O exemption did a great job b/c it protected long time owners from the rapid rise of the market and the new buyers/speculators who raised the market paid full cost. It also shifted costs to I/C property as designed. Everyone who lives in their property should get a bigger break through a large increase in all exemptions.
Comment by qualified somebody nobody sent Thursday, Sep 24, 15 @ 3:20 pm
ANON: =crushing= Your mother makes less than $55,000 per year, yes? The Senior Citizen Assessment Freeze exemption has been around for twenty years and would have exempted the increase in assessment for the last 20 years from affecting her taxes. Unless she makes more than $55,00 gross.
Comment by qualified somebody nobody sent Thursday, Sep 24, 15 @ 3:24 pm
What MrJM said.
Chicago is continuing to attract world class companies, and RE investors from around the world. Actually it has been at an accelerating rate this year.
If there is a financial “tipping point”, beyond which some great outflow will suddenly occur, it won’t be due to the relatively small amounts this increase will impose on any large company.
Comment by walker Thursday, Sep 24, 15 @ 4:27 pm
Voted no. Everybody needs to pay. Everybody benefits.
Democracy needs everybody in.
Comment by Last Bull Moose Thursday, Sep 24, 15 @ 5:40 pm
While it is not an ideal way to avert the regressive effects of increased property taxation, it is reasonable effort.
Comment by C.L. Ball Thursday, Sep 24, 15 @ 6:21 pm
Voted NO. Exemptions to the increase will result in less tax revenue. Right now and for the next few years the priority has to be maximizing revenue collection.
Comment by ejhickey Thursday, Sep 24, 15 @ 6:49 pm
Voted yes, but after reading comments I have to reconsider. I agree with James that targeting relief based on income, the way the senior freeze does, makes more sense than using the home value. In addition, Rahm’s proposal hurts renters, who are often poorer than people with a $250,000 home.
Comment by nona Thursday, Sep 24, 15 @ 9:07 pm
Voted no for a variety of reasons. Ultimately, more taxpayers will be leaving Chicago.
Comment by anon Thursday, Sep 24, 15 @ 9:34 pm
Although it CAN be, the value of your home is not necessarily related to your ability to pay more. Income is a more accurate measure of who needs a break and who doesn’t.
Comment by Sue Friday, Sep 25, 15 @ 1:23 am