* The Chicago mayor’s election is next February. Fiscal Year 2020 begins the following January 1st. The city’s pension contributions will rise $400 million (a 31 percent increase from the previous year) because of state statutes requiring minimum funding levels for various pension funds.
The city’s budget this year is $10 billion. So, $400 million is about a four percent budget increase.
Natural revenue growth ain’t gonna cover it and, remember, other spending pressures will increase as well.
* Amanda Kass, one of the most talented numbers people in the business, wondered what the mayoral candidates had to say about tax hikes and here’s some of what she found…
* Lori Lightfoot: In an interview with Sun-Times reporter Fran Spielman, Lightfoot stated, “Our taxes are way too high.” Spielman followed-up by asking Lightfoot what choice Mayor Emanuel had since without the tax increases the “pension funds were going belly up.” Lightfoot didn’t directly answer, but said she wanted to “reduce the tax burden on middle-and lower-income people.”
* Gary McCarthy: His campaign website states that, “After years of borrowing against our city’s future, Mayor Emanuel can no longer kick the can down the road. Chicago needs real reform. Shady accounting tricks and constant tax hikes will not help fund our municipal and teacher pensions.” It also states, “Our police, fire and teacher pensions have to not only be protected, but funded in full.”
* Paul Vallas: I haven’t seen anything that’s specific to the City’s four pension systems, but Vallas has explicitly critiqued the Chicago Public Schools’ pension holidays and cited past “failures to think and plan proactively” as a reason he’s running. (CPS is an especially hot topic for Vallas because he was its CEO from 1995-2001. CPS’s pension fund is a whole different topic though, so I’m largely tabling that issue for now.) He also pointed out how the pension holidays ended up costing the City more in the long-term.
As of June 2018, I didn’t see any campaign statements specifically about the City’s pensions and the upcoming pension payments from the other four declared candidates (Rahm Emanuel, Ja’Mal Green, Troy LaRaviere, and Neal Sales-Griffin).
So, the fiery progressive Lightfoot says taxes are way too high. Gary McCarthy is talking out of both sides of his mouth. The alleged fiscal geek Vallas has no plan. And nobody else has even addressed it yet.
* Here’s Phil Kadner with some context…
The lowest composite [property] tax rates in Cook County are in Hinsdale (6.5 percent), Burr Ridge (6.8 percent) and Barrington (7.2 percent), according to the Cook County clerk.
The tax rate in Chicago on residential homes is 7.2 percent, according to Orr’s office. The average tax rate in the north suburbs is 9.3 percent. The average in the south suburbs: 11.9 percent, actually a decrease from previous years.
The average tax bill on a single-family home increased 4.78 percent in the south suburbs (an increase of $247), 3 percent in the north suburbs ($213) and 2.75 percent in Chicago ($109), where there has been a lot of squawking about property tax increases.
So, even after the recent increases, Chicago is tied with Barrington for third lowest composite property tax rates in Cook County.
* Meanwhile, you may have seen this story…
Homeowners in Lakeview Township, upset by the big increases in assessments they received from Cook County Assessor Joe Berrios in May, have called a public meeting tonight with government officials.
“I’m alarmed by the size of the increases,” said Andrea Raila, who said the assessor’s estimate of her home’s taxable value went up by 57 percent since the last assessment, in 2015.
Raila, who ran for assessor this year, should know better…
There goes Amanda with her pesky facts again.
The Tribune sums up its series of property tax articles…
An unprecedented analysis reveals that Cook County’s unique property tax system created an unequal burden on residents, handing huge financial breaks to more affluent homeowners while punishing those who have the least, particularly people living in minority communities.
Translated: Lakeview homeowners had better brace themselves.
* Related…
* The Fiscal Firebomb Looming for Small Cities in Illinois: I would suggest that Illinois also create, as Virginia has, an independent state fiscal oversight commission to assess specific fiscal/budget issues and recommend, if warranted, further assistance to help stabilize areas of concern. It should implement, as Rhode Island did in the wake of Central Falls’ municipal bankruptcy, a quasi-SWAT team of city managers and legislators to provide technical assistance and potential state assistance to assess municipal operations and develop long-range financial forecasts for revenue. And finally, the state should adopt a revenue-sharing program, modeled after the one signed into law by former President Ronald Reagan, which assessed relative fiscal need, local tax effort and population.
- Anony - Friday, Jun 29, 18 @ 1:32 pm:
Yep, those city property taxes are too low. Raise them up! It’s not like the sales tax is already high. Or the vehicle stickers. Or the plastic bag tax. Or…
- orlando - Friday, Jun 29, 18 @ 1:48 pm:
No comments from the vanguard of the Springfield status quo?
- Lucky Pierre - Friday, Jun 29, 18 @ 1:54 pm:
A fiery progressive who says taxes are way too high?
A progressive wants to expand government which would of course require more revenue.
Perfect timing for Lakeview “progressives” to see their assessed values increase by 1/3 and the underlying property tax burden increasing 6 months before the election.
Maybe the Governor has a point after all about property tax reform.
Nah, Mike Madigan Democrats aren’t change people
- Lester Holt’s Mustache - Friday, Jun 29, 18 @ 1:57 pm:
==No comments from the vanguard of the Springfield status quo?==
That’s a good question. Lucky Pierre hasn’t been here all week, I can only guess that he isn’t here defending Rauner’s status quo because Bruce flipped the program to “standby” when he left for DC.
- Oswego Willy - Friday, Jun 29, 18 @ 1:58 pm:
===Amanda Kass, one of the most talented numbers people in the business===
Her insight and thoughtfulness too, to “ok, now what does this mean”, makes her someone you should read.
“M” Daley kept property taxes low, Rahm hasn’t put property taxes where they need to be… revenue isn’t supporting what is needed to meet obligations.
Governing includes tough choices.
Let’s also remember, choosing to keep property taxes low, and the answer being to get property taxes at the necessary levels… that’s not ignoring the cry that… property taxes are “too high” by residents, it’s “M” Daley and Rahm flooding the field by saying things can be done at a level of revenue that was just not so. It’s not that the property taxes were in line with the state levels, and…
Nope. That’s not what’s happening now.
- titan - Friday, Jun 29, 18 @ 2:03 pm:
Is anyone yet suggesting a progressive property tax structure?
- Lester Holt’s Mustache - Friday, Jun 29, 18 @ 2:04 pm:
Hey Lucky is back - we were all wondering where you got to. Been out in DC holding the Govs umbrella all week?
Many here have castigated Rahm the last few years, and rightfully so in some cases, but for better or worse he’s the only one working towards correcting years of Daley mismanagement. None of these candidates seem like they even have a clue where to start.
- BlueDogDem - Friday, Jun 29, 18 @ 2:04 pm:
Has anyone suggested a city earnings tax?
- Steve - Friday, Jun 29, 18 @ 2:41 pm:
In the coming years progressives will be challenged on paying for their values. The problem for Chicago is many people might not want to pay higher property taxes for CPS…
- M - Friday, Jun 29, 18 @ 2:49 pm:
“A progressive wants to expand government which would of course require more revenue.”
False! This is an empty statement which proves nothing.
- Popeye - Friday, Jun 29, 18 @ 2:50 pm:
Wait till the new Assesor reviews the tax rates of the high rise buildings downtown. Those buildings have been under assessed for years, look at the sale price of the buildings vs the taxes paid. When the owners/ corporations who own those buildings get their new non-Berrios edition tax bills the world will end, by their estimates if they have to pay. High taxes and high rates will go away when 2 things occur: everyone pays their fair and equitable share of taxes and the value of property goes up on the south and west side so more people are paying taxes.
- Lucky Pierre - Friday, Jun 29, 18 @ 2:55 pm:
Democrats version of reform is just continue to raise taxes but ignore the cost drivers of increasing state and local taxes
Tax increases are much more palatable if politicians would actually address the underlying problems that is crowding out all other spending- the growing pensions crisis
- Small town taxpayer - Friday, Jun 29, 18 @ 2:57 pm:
===In an interview with Sun-Times reporter Fran Spielman, Lightfoot stated, “Our taxes are way too high.” ===
For many years the property tax rate in the City of Chicago was the lowest in all of Cook County. The tax rate for Chicago has recently increased but is still one of the lower tax rates in the county. According to the most recent data released by the Cook County Clerk, the tax rate for homes in Chicago is 7.2 percent. The average tax rate in the north suburbs is 9.3 percent. The average in the south suburbs is 11.9 percent. The suburbs of Ford Heights (33.99 percent), Park Forest (33.6 percent) and Riverdale (28.7 percent) have the highest average tax rates in Cook County. A tax rate of 7.2 percent appears to me to be rather reasonable when compared to the tax rates in most of Cook County.
- Lucky Pierre - Friday, Jun 29, 18 @ 3:03 pm:
Ever notice all of the high priced skyscrapers and other commercial properties in Chicago Small town taxpayer?
That is the reason the tax rate for homes in Chicago is 7.2% and is much lower than the Cook County suburbs
- 32nd Ward Roscoe Village - Friday, Jun 29, 18 @ 3:05 pm:
Oh, no. I am in Lakeview! Ouch.
I am also wondering about the city earnings tax or commuter tax. It would be paid for by people who can’t vote for Chicago mayor. Sounds perfect!
- Arthur Andersen - Friday, Jun 29, 18 @ 3:13 pm:
Just wanted to add a tip of the cap to Amanda for scooping everybody on this, tho a scoop likely wasn’t her intent. She is the best.
- City Zen - Friday, Jun 29, 18 @ 3:24 pm:
==The suburbs of Ford Heights (33.99 percent), Park Forest (33.6 percent) and Riverdale (28.7 percent) have the highest average tax rates in Cook County.==
I’m not sure how that can be remedied. Riverdale/Dolton SD 148 already receives 78% of its education budget from state and federal sources. With the new education funding formula, that number will only increase. They still need police, fire, library, city services, etc. Someone has to pay for that, and that someone is a Riverdale resident.
- BlueDogDem - Friday, Jun 29, 18 @ 3:44 pm:
…. I would suggest… create an oversight commission. Where do I sign up.
- BlueDogDem - Friday, Jun 29, 18 @ 3:59 pm:
Ron? Ron? Where are you?
- BlueDogDem - Friday, Jun 29, 18 @ 4:00 pm:
I kinda miss the kleptocracy thing.
- Oswego Willy - Friday, Jun 29, 18 @ 4:01 pm:
===- BlueDogDem - Friday, Jun 29, 18 @ 3:59 pm
Ron? Ron? Where are you?===
The fact you are probably, arguably, the lone person that would look for “Ron”… is probably why you get ignored, at times.
Please don’t respond. I said my piece on this and your comment.
- Regular democrat - Friday, Jun 29, 18 @ 4:30 pm:
The money will come from property taxes again. Nobody will admit that while running for office for obvious reasons. Pretty soon someone will bring up the elusive casino but that is a pipe dream. And the beat goes on
- ICU - Monday, Jul 2, 18 @ 10:40 am:
“High taxes and high rates will go away when 2 things occur: everyone pays their fair and equitable share of taxes and the value of property goes up on the south and west side so more people are paying taxes.”
There are so many properties on the south & west side valued 50-200% higher than they are worth. Property owners are forced to pay those taxes accordingly. One man’s property was valued 4x higher than the auction amount. They couldn’t even sell it for that. We need equity & transparency not arbitrary assessments. Speaking of Raila, I saw this Friday night:
http://abc7chicago.com/realestate/some-homeowners-in-foreclosure-clusters-seeing-higher-property-taxes/3676235/
- Midnight in Paris - Monday, Jul 2, 18 @ 11:44 pm:
If all properties were of equal value, then the tax rate talk might have more meaning. It costs a certain amount of money to hire a police officer. It might be less in Barrington than in Park Forest, but it’s not 4x less as those tax rates would indicate. It’s ulitmately the dollars paid in property taxes that is what matters. Your property may not be worth much, but we need “x” amount of dollars from the local tax payers if you want teacher, fire and police.