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*** UPDATED x1 *** Lightfoot wants state approval for city tax hikes

Tuesday, Aug 20, 2019

* Replace your communications director, go on vacation and then leak the news that you want the General Assembly to allow you to impose a service tax and a real estate transfer tax. Interesting choices

Mayor Lori Lightfoot plans to ask state lawmakers to help Chicago dig out of a $1 billion hole — by empowering the city to tax high-end professional services and raise the transfer tax on big-ticket home sales [over $1 million], City Hall sources said Monday. […]

Sources said the mayor is prepared to portray those two local taxes as the only alternative to a dreaded property tax increase she wants desperately to avoid after former Mayor Rahm Emanuel doubled the city’s levy.

John Patterson, a spokesman for Illinois Senate President John Cullerton (D-Chicago), said the veto session is still two months away and it’s “premature to start speculating” on Chicago’s needs.

Patterson would say only that the Senate president is “eager to work with” Lightfoot and has “always tried to be helpful” to the city — but, he added: “These issues would be a heavy lift in Springfield.” […]

[House Republican Leader Jim Durkin said]: “I just don’t see my caucus embracing either of those two concepts…Our caucus believes that we’ve placed enough taxes and fees upon homeowners and businesses large and small throughout the state.”

I’ve asked the governor’s office for a response. I don’t think they were briefed in advance of this leak.

Also, I’m hearing that the mayor wants to lengthen the pension payment ramp. She’d need GA approval to do that as well.

*** UPDATE *** Pretty tame response from Emily Bittner at the governor’s office…

The governor is committed to creating an environment in the state where all cities can thrive, because Illinois succeeds when its cities succeed. The administration looks forward to working with stakeholders on a productive veto session for communities throughout Illinois, including Chicago.

- Posted by Rich Miller        

54 Comments
  1. - Pick a Name - Tuesday, Aug 20, 19 @ 9:46 am:

    Ah, just as the the state of Illinois will have a day of reckoning regarding finances, it appears Chicago is having it now.


  2. - Not It - Tuesday, Aug 20, 19 @ 9:47 am:

    I’d be more inclined to support this if I had any evidence — any evidence at all — that the Mayor even attempted to find cuts.

    The citizen survey they sent out last week was 100% focused on new revenues. Didn’t even mention cuts.


  3. - The Captain - Tuesday, Aug 20, 19 @ 9:48 am:

    For years the progressive caucus in the City Council were a collection of useless people who would use a series of unrealistic policy proposals as justification to vote against anything of consequence and grandstand while doing so. Now those unrealistic policy proposals are coming out of mainstream voices, like the Mayor’s office in this instance, and I can’t figure out if they’re unaware of how unlikely this is or if they’re well aware but want to demonstrate that they went through these steps first before pivoting to something more realistic. I guess we’ll find out.


  4. - Pawar Lost - Tuesday, Aug 20, 19 @ 9:55 am:

    Didn’t Lightfoot campaign on a promise to make spending cuts before raising taxes?


  5. - Oswego Willy - Tuesday, Aug 20, 19 @ 9:56 am:

    ===John Patterson, a spokesman for Illinois Senate President John Cullerton (D-Chicago), said the veto session is still two months away and it’s “premature to start speculating” on Chicago’s needs.

    Patterson would say only that the Senate president is “eager to work with” Lightfoot and has “always tried to be helpful” to the city — but, he added: “These issues would be a heavy lift in Springfield.”===

    Patterson is top shelf because you get it straight, and it’s brief.

    Lightfoot would be wise to get a “Patterson”, ‘cept the choices the Mayor is making and dropping via leaks make no sense in the idea of process or possibly. The time of the learning curve excuse is ending.

    ===…just as the the state of Illinois will have a day of reckoning regarding finances, it appears Chicago is having it now.===

    They need revenue, or an opportunity to extend the ramp or modify ways to get to an equilibrium, or all the above.

    Chicago and Illinois both need long term fiscal moves that are not only constitutional but politically feasible.

    A day of reckoning is a bit hyperbolic, given that options are still possible, it’s the will and execution that may be missing.


  6. - Shytown - Tuesday, Aug 20, 19 @ 9:59 am:

    What a strange, and dare I say, amateur move. Team Lightfoot has done little to nothing to build the relationships needed in Springfield to get these taxes approved and frankly I don’t think she and her team have an understanding of the effort required to pass legislation, especially legislation that’s going to require raising taxes. Beyond that, she wants Dems across the state wearing the jacket on increasing taxes by hundreds of millions of dollars? That’s gonna look really good on the mail pieces and paid ads Republicans will hit them with during the 2020 cycle. This could not be more ill-conceived.


  7. - District Nine - Tuesday, Aug 20, 19 @ 9:59 am:

    The passing-the-buck has reached a new height of absurdity. Lightfoot’s administration should remember she didn’t win all 50 wards, Preckwinkle lost them. This is behavior reminiscent of Toni.


  8. - TNR - Tuesday, Aug 20, 19 @ 10:00 am:

    == asked the governor’s office for a response. I don’t think they were briefed ==

    The “heavy lift” remark from Patterson indicates a lack of message coordination, so it would seem Cullerton didn’t know the trial balloon was being floated either. How do you not have one of the city’s top legislative advocates in the loop?

    I’m rooting for the mayor and her crew, I really am. But they’ve used up all their mulligans. No more “they’re new to this” excuses.


  9. - CT Resident - Tuesday, Aug 20, 19 @ 10:01 am:

    @Not It:
    Question #4. Which areas of spending would you consider reducing, increasing or remaining the same in order to balance the City’s budget?

    Did you even bother looking at the survey? Or just took some comment elsewhere for their word?


  10. - lake county democrat - Tuesday, Aug 20, 19 @ 10:13 am:

    Is it possible that this was leaked in order to be shot-down? Maybe to gain some leverage in the negotiations with CTU, or a prelude to other tax hikes? It’s like “see, I tried to do it differently” - same thing with the casino site “survey” that showed none of the non-downtown cites were very attractive.


  11. - Steve - Tuesday, Aug 20, 19 @ 10:15 am:

    There might not be the political will in Springfield to help Lightfoot out on this but: Chicago has a budget problem. Chicago can cut spending or raises taxes or both. The money has to come from somewhere . Chicago faces big pension obligations that have to be paid.


  12. - A guy - Tuesday, Aug 20, 19 @ 10:29 am:

    Won’t be long before you see one of those “Invisible Fences” around the city. Those real estate tax stamps are miserable.


  13. - Lester Holt’s Mustache - Tuesday, Aug 20, 19 @ 10:31 am:

    This is the second time Lightfoot has blindsided JB and statehouse dems with DOA bailout proposals. You can’t repeatedly make incredibly important “asks” through the news media - that’s not how any of this works. If she keeps this up, she’s going to find herself on a island no matter how many wards she wins or Colbert show appearances she makes


  14. - Oswego Willy - Tuesday, Aug 20, 19 @ 10:32 am:

    ===Won’t be long before you see one of those “Invisible Fences” around the city.===

    As a Trump supporter I’m not surprised you went with a fence thought… lol


  15. - Last Bull Moose - Tuesday, Aug 20, 19 @ 10:37 am:

    The City Budget comes out in October. She should have rough estimates by now. I don’t think it looks good.

    A real estate transfer tax produces erratic revenues; lots of money in a hot market and little in a cold one. These revenues should go to build a rainy day fund, not to be counted on as steady revenue.


  16. - Just Me 2 - Tuesday, Aug 20, 19 @ 10:40 am:

    CT Resident- how about cuts to the overly generous benefit packages to City’s Employees? How about cuts to the Fire Department, whose budget has exploded over the years but the number of fires in the city has gone down?

    Also, I’m not the Mayor. Lightfoot is. It is the Mayor’s job to manage the city, not mine.


  17. - Chuckles - Tuesday, Aug 20, 19 @ 10:43 am:

    @Willy -

    The mayor’s decision to leak this proposal without talking to the governor or other stakeholders make sense if:

    1) She is itching for a fight with Springfield since beating up Ed Burke has lost its media appeal.

    2) She’s not interested in actually passing a plan to raise taxes on some of her biggest supporters;

    3) The real goal here is to have someone to blame when she raises property taxes.


  18. - Just Me 2 - Tuesday, Aug 20, 19 @ 10:48 am:

    CT Resident - you are embarrassing yourself. You and I both know that “survey” is just a push poll to build support for tax increases.


  19. - Oswego Willy - Tuesday, Aug 20, 19 @ 10:50 am:

    Let’s take these one at a time..,

    ===1) She is itching for a fight with Springfield since beating up Ed Burke has lost its media appeal.===

    Since Lightfoot has no voting bloc, no history as an elected, no leverage as a mayor can’t outmaneuver a governor and the
    General Assembly, this idea isn’t at all wise or possible. I’m guessing snark on your end.

    ===2) She’s not interested in actually passing a plan to raise taxes on some of her biggest supporters===

    Then why suggest even impossible ways to allegedly do so? The seriousness is that Lightfoot wants a bailout and hasn’t mastered the “leak to leverage” messaging to make her will the will necessary.

    ===3) The real goal here is to have someone to blame when she raises property taxes.===

    I dunno if I’d want to go against a governor who spent $300K a day in a campaign for 400+ days in a messaging “thingy” to take the heat off a property tax increase.

    Lightfoot would be better served blaming Rahm, as then everyone from the Governor on down can sympathize and and help by saying “Lightfoot inherited Rahm’s mess, we’re here to help”

    How’s that?


  20. - Norseman - Tuesday, Aug 20, 19 @ 10:50 am:

    === I don’t think they were briefed in advance of this leak. ===

    TNR, it goes beyond message. There is a problem with policy coordination, or a minimum of discussion, with your allies. IL Dems have notably had a problem with that basic governing principle over the years. (The GOP just takes orders from their wealthy benefactors.) Given the severity and number of problems facing state and local governments, the time is now for some coordinated planning among the leadership. We can hope.


  21. - Blue Dog Dem - Tuesday, Aug 20, 19 @ 11:00 am:

    1/4% city earnings tax. Why not. St. Louis recently overwhelmingly approved retention.


  22. - BR91 - Tuesday, Aug 20, 19 @ 11:09 am:

    She’s doing the same thing with the police. Leaking things about a contract, or lack thereof, to see how they.

    She wasn’t ready for the big leagues. First 100 days or not, she’s going to own this thing real soon if she doesn’t straighten out policy and subliminal messaging, she will be in more trouble than Rahm was his second term.

    Could be a one-termer.


  23. - Bertrum Cates - Tuesday, Aug 20, 19 @ 11:12 am:

    It does not matter who is staffing the Mayor so long as she keeps answering her cell phone and sticking her foot in her mouth. Huge missteps like this will continue if she does not appreciate she is now the officer - not a senior aide who can talk on background to a reporter. Me thinks that will make difficult if not impossible a solution for city pensions.

    Has anybody checked yet to see if Warlander has shorted the city fund? /s /ns


  24. - Langhorne - Tuesday, Aug 20, 19 @ 11:15 am:

    Clumsy. Amateurish. Inept.
    She needs some folks who know how to play the game.

    If spfld is mostly a dead end, for a combination of reasons, she needs to know that quickly. Focus on the doable. Half a sandwich.


  25. - Speculator - Tuesday, Aug 20, 19 @ 11:19 am:

    Rich, Your comment regarding Lightfoot’s desire to legnthen the pension ramp contradicts her comments to a reporter on Thursday last week.

    As reported in the Sun-Times:
    “The mayor was asked if she also would ask the legislature to extend time that the city has to reach the 90% funding level on city pension obligations.

    “I’m not gonna talk about specifics, but we’re gonna live within the structure that we have,” she said.”


  26. - Three Dimensional Checkers - Tuesday, Aug 20, 19 @ 11:22 am:

    Correct me if I am wrong, but I believe the service tax was part of Mayor Lightfoot’s campaign positions. It’s not totally out of left field, although she should brief the Governor and legislative leaders before announcing it.


  27. - 44th - Tuesday, Aug 20, 19 @ 11:45 am:

    Property values have been flat or down in the City for 10 years. Taxes keep going up. New taxes will push RE values down. But not to worry, the new assessor is just pushing through double digit increases.


  28. - Meek MLL - Tuesday, Aug 20, 19 @ 11:53 am:

    just goes to show what happens with more and more people in charge who are used to negotiating via email or text instead of picking up the phone


  29. - Looking down the Road - Tuesday, Aug 20, 19 @ 12:00 pm:

    The tax on big ticket services is interesting. If a Chicago firm does work for a Chicago business - no issue. If a Chicago firm does work for an out of state business, does the tax apply? If an out of state firm does work for a Chicago business does the tax apply? If a Chicago accounting firm farms out work to an out of state office does the tax apply? I can see a real can of worms.


  30. - RNUG - Tuesday, Aug 20, 19 @ 12:02 pm:

    Sandbagging the partners you need to make things happen is not good politics.


  31. - RNUG - Tuesday, Aug 20, 19 @ 12:06 pm:

    == The real goal here is to have someone to blame when she raises property taxes. ==

    That is the only reason that makes sense of this kind of move


  32. - Oswego Willy - Tuesday, Aug 20, 19 @ 12:09 pm:

    ===That is the only reason that makes sense of this kind of move.===

    Even “that”, blindsiding partners willing to help, even with cover, by floating ridiculousness, and forcing others to call you out, that’s not good politics for cover here.

    “That is the only reason that makes sense of this kind of move”

    … with extremely poor execution of that strategy.


  33. - Chuckles - Tuesday, Aug 20, 19 @ 12:17 pm:

    OW -

    I am not saying a fight with Springfield is wise or winnable.

    Whether it is just the personality of the mayor, or the margin of her electoral victory or their perception of the power of her office, this mayor’s office believes they have a bully pulpit.


  34. - Oswego Willy - Tuesday, Aug 20, 19 @ 12:34 pm:

    ===I am not saying a fight with Springfield is wise or winnable.===

    It’s not.

    Lightfoot, like Rahm, like Daley, like…

    Mayors can’t control 60/30 or worse 71/36. Mayors need Springfield, and a strong floor leader / caucus advocate and great advice on who to call and plead to… and when to visit Springfield. Mayors can’t win, they can get what they need through compromise with partners… and begging.

    ===Whether it is just the personality of the mayor, or the margin of her electoral victory or their perception of the power of her office, this mayor’s office believes they have a bully pulpit.===

    I look at the personnel situation as the tell;

    They are over their heads in understanding that “nuance” isn’t just a fancy way of politicking. The personnel situation(s) and subsequent issues and politics with those folks… it’s not just her personality or thinking about mandates or vote totals, it’s not even a bully pulpit. It’s a misunderstanding of process and politics within all you mentioned.


  35. - theCardinal - Tuesday, Aug 20, 19 @ 12:42 pm:

    Should have asked for a bite at that apple in the spring when everyone was so excited to see what you would do in Springfield. If I understand it all the residents get the benefit of the pensioners previous employment, but just the few high end service folks get to pay the burden? That will work well in the constitutional challenges that will be sure to come from law dawgs and CPAs. Suburban commercial relators are smiling.


  36. - Looking down the Road - Tuesday, Aug 20, 19 @ 12:44 pm:

    Even a combination of an increased transfer tax and a high end services tax aren’t going to provide enough $$. Possibly squeeze 150-200M out of increased transfer tax, another 100-150M out of a tax on high end services. Not enough.


  37. - Lucky Pierre - Tuesday, Aug 20, 19 @ 1:15 pm:

    Should be interesting to see the reaction of wealthier Northside homeowners, who voted for Lightfoot and JB overwhelmingly, many of whom then saw their property taxes/ assessed value go up 30% this Fall, reaction to a proposed transfer tax hike in addition to JB’s fair tax proposal.

    Unlike the Governor, they can’t remove their toilets and shield their wealth off shore.


  38. - Rich Miller - Tuesday, Aug 20, 19 @ 1:29 pm:

    ===many of whom then saw their property taxes/ assessed value go up 30% this Fall===

    Yep. And they voted for that when they ousted Joe Berrios.


  39. - Oswego Willy - Tuesday, Aug 20, 19 @ 1:35 pm:

    ===JB’s fair tax proposal.===

    97% of tax filers won’t see an increase.

    The increase, for the 3%, will begin after the $250K threshold.


  40. - A guy - Tuesday, Aug 20, 19 @ 1:41 pm:

    ==As a Trump supporter I’m not surprised you went with a fence thought… lol==

    Well aren’t you clever, redundant, wordy and weak.


  41. - Oswego Willy - Tuesday, Aug 20, 19 @ 1:43 pm:

    ===Well aren’t you clever, redundant, wordy and weak===

    Get that one from “Trump’s Greatest Tweet” list, or…

    LOL


  42. - Stuntman Bob's Brother - Tuesday, Aug 20, 19 @ 1:47 pm:

    If this is intended to prop up close-in suburban home prices by driving more middle-class folks out of the city, all I can say is, “Thanks, Mayor”.


  43. - A guy - Tuesday, Aug 20, 19 @ 1:52 pm:

    ==Get that one from “Trump’s Greatest Tweet” list, or…==

    No. Unlike you it’s original material and I only said it once.


  44. - Oswego Willy - Tuesday, Aug 20, 19 @ 2:00 pm:

    ===Unlike you it’s original material and I only said it once.===

    Meh, everyone’s a critic.

    You support the racist President, you also are so pro-life you supported Rauner’s re-elect after signing the most liberal abortion bill, at that time, in state’s history.

    You don’t like that mirror. I get it.

    Realizing you’re a partisan when you think you stand for things is tough I’m guessing.

    To the Post,

    ===Should have asked for a bite at that apple in the spring when everyone was so excited to see what you would do in Springfield===

    Timing and getting sworn in wouldn’t allow for that to happen this time.

    Veto session and next Spring will be Lightfoot’s first test, not this session.


  45. - Frank talks - Tuesday, Aug 20, 19 @ 2:08 pm:

    Any chance Cook County or the City of Chicago will ever change their assessed value ratio to that of the rest of the State?

    I believe homeowner property taxes everywhere in the State are paid at 1/3rd assessed value and in Cook and Chicago it’s 1/10th?

    This could just be urban legend but I always recall folks complaining the suburbs pay 1/3 of their value while city only pays 1/10?


  46. - propowner - Tuesday, Aug 20, 19 @ 2:11 pm:

    ===many of whom then saw their property taxes/ assessed value go up 30% this Fall

    Yep. And they voted for that when they ousted Joe Berrios. ===

    @Rich. Reassessments for City of Chicago took place last year under Joe Berrios…


  47. - A guy - Tuesday, Aug 20, 19 @ 2:14 pm:

    ==You support the racist President, you also are so pro-life you supported Rauner’s re-elect after signing the most liberal abortion bill, at that time, in state’s history.==

    You must be in on the new New York Times strategy with all your “racist” talk. I’m pretty far from anything remotely resembling a racist, so you can can that bs now.

    Supported Ives vs. Rauner and then Rauner vs. JB. When the luxury of realistic choices offered themselves, I voted those issues. When they didn’t, I couldn’t.

    Reading your implications that I’m both a racist and “not” pro life, makes anything you say something to be discounted at face value. That makes you what you accuse so many others of; a troll. An exceptional one at that.


  48. - Oswego Willy - Tuesday, Aug 20, 19 @ 2:22 pm:

    ===You must be in on the new New York Times strategy with all your “racist” talk. I’m pretty far from anything remotely resembling a racist, so you can can that bs now.===

    No, i said you support the racist Trump.

    You’re not denying that. Got it.

    This is most fun, lol

    ===When the luxury of realistic choices offered themselves===

    So, really, you’re a policy voter… by convenience?

    The comedy writes itself.

    You stand for things, but when it’s convenient. Hysterical.

    ===Reading your implications that I’m both a racist and “not” pro life, makes anything you say something to be discounted at face value.===

    You support Trump, you vote on policy when it’s convenient.

    That’s who you are. You told me. It’s not trolling telling you what you told me.

    You have to live supporting Trump, and what that says about you. You don’t get to ignite the racist overpinnings by “I’m not…”

    You support Trump.


  49. - R A T - Tuesday, Aug 20, 19 @ 2:23 pm:

    I know this is not my site but I feel I need to say this as someone who really enjoys it. The needless, unproductive bickering between OW and A guy in so many threads is really tiresome.


  50. - Oswego Willy - Tuesday, Aug 20, 19 @ 2:24 pm:

    - R A T -

    My apologies.


  51. - A guy - Tuesday, Aug 20, 19 @ 2:53 pm:

    R A T, I agree.


  52. - City Zen - Tuesday, Aug 20, 19 @ 3:17 pm:

    How exactly would taxing “high-end” legal and accounting services work?

    a) Legal/accounting service provider located within Chicago charges clients the tax no matter where the client resides
    b) Clients located in Chicago are subject to the tax regardless or where the service provider resides


  53. - James - Tuesday, Aug 20, 19 @ 3:30 pm:

    If a service tax ever materializes, ideally it would be statewide with the State (IDOR sales tax unit) collecting it. The bill language could allow home rule units to opt in (with or without a voter referendum) with their own identical service tax that would also be collected by the State.

    But it doesn’t appear the Governor wants a service tax any time soon–he doesn’t want to endanger voter acceptance of the graduated income tax.

    Legislation could be limited to home rule units that opt in or to cities over 3,000,000 population. But that would leave the City of Chicago Law Department to fend off legal challenges–not impossible, possibly an outsourced job–and to collect the tax–much more challenging the the City’s Department of Finance.

    Also, if the tax were limited to local governments or just Chicago, defining who it would apply to and under what circumstances is a challenging assignment in bill drafting. A Cleveland law firm performing services for Chicago clients? A Chicago law firm performing services for Cleveland clients?

    A Municipal income tax collected by the State would be easier to administer, since the State is already doing it and the graduated income tax proposal, if approved, would enhance the revenues. However, definition of taxpayer is problematic–the tax could cover those residing outside Chicago but working within, working outside Chicago but residing within, or only Chicago residents that work in the City.


  54. - Suburbanator - Tuesday, Aug 20, 19 @ 3:45 pm:

    Wouldn’t taxing legal and accounting services in just Chicago give a competitive advantage to suburban law and accounting firms and drive some of those services to relocate?


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