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Today’s number: $19

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In a budget briefing [yesterday], new [Chicago] schools CEO Forrest Claypool made it clear that if the state does not help with the district’s fast-rising pension costs—by picking up part of the tab itself, forcing teachers to pay more or giving the district more time to pay off unfunded pension costs from previous years—the impact will be severe.

Without $480 million in relief in its proposed $5.7 billion budget, the district will have to either engage in “more unsustainable borrowing” or impose “serious classroom cuts,” he said.

Claypool did not detail what those cuts would be, but said the day of reckoning will occur “at the beginning of the 2016 calendar year.”

* But…

Property taxes will rise to the state-mandated cap, generating $19 million and costing the owner of a $250,000 home an additional $19 a year.

From what I’ve been told by House and Senate Democrats, the city itself can levy for the capped CPS. The schools don’t need special legislation.

Obviously, $19 a year ain’t much of anything. They need to put some significant local skin in the game before they ask the state for anything.

posted by Rich Miller
Tuesday, Aug 11, 15 @ 10:04 am

Comments

when will they live within their means and stop taking my money. the schools already get 79% of my property taxes…

Comment by The Guy Tuesday, Aug 11, 15 @ 10:06 am
“$19 a year ain’t much of anything.”

But, as noted, it would add much-needed credibility to the claim, “We’ve done all we can without aid from Springfield.”

– MrJM

Comment by @MisterJayEm Tuesday, Aug 11, 15 @ 10:07 am
Trying to extort half a Bill from Rauner and Madigan? That will work out well. /s

Comment by Formerly Known As... Tuesday, Aug 11, 15 @ 10:09 am
I agree, but out of fairness to Claypool it’s worth noting that such a $19 increase wouldn’t come in a vacuum: it will be in addition to the “natural” increases Orr has said are coming, everything else the city will need to raise property taxes for, the rise in the Cook County sales tax, the expected Illinois income tax hikes, etc.

Comment by lake county democrat Tuesday, Aug 11, 15 @ 10:10 am
Heck, I pay Chicago real estate taxes, and I’d be happy to round that up to $20.

Comment by JoanP Tuesday, Aug 11, 15 @ 10:13 am
Last year CPS used 14 months of revenue to balance the budget for their 12 month school year.

Who knew that using ==accounting gimmicks== during an election year would lead to budget problems the next year?

Comment by Formerly Known As... Tuesday, Aug 11, 15 @ 10:18 am
But sometimes it’s not the amount each person pays - it’s the totality of what the entire homeowner and taxpayer base pays. When you’re talking about the sheer number of said property taxpayers in an area like Chicago and Cook County as a whole, an extra $5 per half year makes a difference. It’s simple actuarial science, and it allows Mr. Claypool to ask people for a small sacrifice without making the average taxpayer shell out more than necessary.

Comment by Team Sleep Tuesday, Aug 11, 15 @ 10:19 am
Madigan’s buddies will only end up paying $9.50.

Comment by Jose Abreu's next homer Tuesday, Aug 11, 15 @ 10:21 am
My post was pure snark…let’s not jump to a Blame Madigan post. Sox won last night!

Comment by Jose Abreu's next homer Tuesday, Aug 11, 15 @ 10:22 am
Rahm willing to use anyone and everyone to carry his water. Didn’t work last year. Rauner can’t wait to do it this year.

Comment by From the 'Dale to HP Tuesday, Aug 11, 15 @ 10:32 am
We need to find a better way of funding our pension debt than resorting to our fallback position of taxing homeowners. The GA needs to fight fire with fire. Rauner is going after a core constituent of the Democratic Party… Let’s go after some of the Governor’s. Illinois can no longer afford to allow farmers to purchase equipment and chemicals tax free. Rural assessments need to be increased. Livestock feed can no longer fall under the resale exemption. Billions and billions of dollars in equipment have been purchased by these businesses tax free… It needs to stop. We can also institute an equitable wage tax at 6.2 percent for wages above 118,500 (the current wage ceiling for social security tax. Tax the employer the 6.2 as well. The equitable wage tax should be statutorily written as a surtax targeted to paying off long term debt which includes the pension systems.

Comment by Triple fat Tuesday, Aug 11, 15 @ 10:41 am
There has always been the feeling in the rest of the state that homeowners in the Chicago area (especially Chicago)don’t pay as much property taxes for the same house market value that the rest of the state does. It confuses the issue that Cook County assesses property different than the rest of the state.

“The required assessment level for tax purposes on any parcel of real property in any county, expect Cook County, is 33 1/3 percent of the property’s fair market value, excluding farmland and farm buildings.

Cook County classifies property and assesses classes at different percentages of fair market value. For example, the required assessment level for the residential class is 10 percent of fair market value.” I guess the true comparison then would have to be the percent of the value of one’s house that one’s property tax bill is. I have never really seen that type of comparison done. Does anyone have that kind of information?

Comment by Joe M Tuesday, Aug 11, 15 @ 10:41 am
==There has always been the feeling in the rest of the state that homeowners in the Chicago area (especially Chicago)don’t pay as much property taxes for the same house market value that the rest of the state does.==

They don’t. http://www.chicagobusiness.com/article/20150711/ISSUE05/307119997/want-to-soak-the-rich-look-at-the-property-tax

Comment by Formerly Known As... Tuesday, Aug 11, 15 @ 10:48 am
As stated on an earlier post, it needs to bedirectly tied to the FICA ceiling and if the ceiling is removed it needs to go away.

Comment by Triple fat Tuesday, Aug 11, 15 @ 10:48 am
My real estate tax rate for elementary & high schools in Brookfield is well over twice the CPS rate. Here’s an idea - the GA & Gov. can let CPS double it’s rate so Chicago taxpayers are doing as much to support schools as elswhere. Also stop the diversion of school tax dollars into the dozens of TIF districts.

Comment by Huh! Tuesday, Aug 11, 15 @ 10:49 am
Rahm is winding down the biggest TIF districts, which will help a very little bit.

Comment by Tone Tuesday, Aug 11, 15 @ 11:02 am
The teachers must also face the fact that they will not get raises and they must contribute more than 2% to their retirement.

Comment by Tone Tuesday, Aug 11, 15 @ 11:03 am
“$19 a year ain’t much of anything.”

But, as noted, it would add much-needed credibility to the claim, “We’ve done all we can without aid from Springfield.”

– MrJM

But this

From what I’ve been told by House and Senate Democrats, the city itself can levy for the capped CPS. The schools don’t need special legislation.

Comment by OneMan Tuesday, Aug 11, 15 @ 11:21 am
Great 2012 Crains article by Greg Hinz about how we got here. Shocking and amazing. http://www.chicagobusiness.com/article/20121129/BLOGS02/121129786/heres-why-chicago-teachers-pension-fund-is-in-meltdown They took a 10 year pension holiday?

Comment by NoGifts Tuesday, Aug 11, 15 @ 11:55 am
Oh my God just listen to CPS teachers squeal! God bless Kennedy King graduates who oink the loudest.

Comment by St. Ambrose Tuesday, Aug 11, 15 @ 12:07 pm
Tone- 9% of teacher’s salaries is taken for pensions. Total compensation is total compensation. Smoke and mirror accounting is why you think it is 2%. If the federal govt were to start taxing pensions, they would be taxing the full 9%.

Comment by Liberty Tuesday, Aug 11, 15 @ 12:10 pm
- Triple fat - @ 10:41 am:

Some of your suggestions are going to require a constitutional amendment to change the flat income tax provision.

Comment by RNUG Tuesday, Aug 11, 15 @ 12:13 pm
== Obviously, $19 a year ain’t much of anything. They need to put some significant local skin in the game before they ask the state for anything.==

Especially since Chicago homeowners enjoy the lowest property taxes in the state.

Comment by anon Tuesday, Aug 11, 15 @ 12:14 pm
As far as Chicago taxpayers having to take a property tax hit to make up for the CPS pension shortfall, I have zero sympathy. Relatively speaking compared to property value, they have cheap property taxes. They got a special deal on state school funding … and then they took multiple pension holidays to keep taxes down instead of funding the school pensions. They took the various state pension funding mis-steps and super-sized it.

So no, I don’t feel the state should bail them out. If there is a bail-out, it should require the mayor give up control of the school board and they go back to being elected just like in the rest of the state. May not change anything but it would be a step towards making the board actually accountable to the public who pays their bills … something Rauner should be in favor of.

Comment by RNUG Tuesday, Aug 11, 15 @ 12:20 pm
===if the state does not help with the district’s fast-rising pension costs—by picking up part of the tab itself,===

The State of Illinois has its own very large pension funding problem. Paying the teacher portion of the pension contribution for CPS teachers is not an option I would even consider.

===the district will have to either engage in “more unsustainable borrowing” or impose “serious classroom cuts,” he said.===

Chicago has the lowest property tax rate of any city in Cook County. I would add “property tax increase” at the head of the list of options to be considered as a solution to the financial issues of the CPS.

Comment by Hit or Miss Tuesday, Aug 11, 15 @ 12:21 pm
$19 isn’t much if it would actually get this mess settled but it won’t.
Anon is right. Chicago taxes are low but we do not get the services that other communities receive. Sometimes, I feel like the main thing we get from our taxes is paying the salaries for the Alderman and the Mayor which offers plenty of political entertainment for everyone.

Comment by Belle Tuesday, Aug 11, 15 @ 12:25 pm
If you wanna argue Chicago doesn’t pay enough in property taxes, fine, don’t think that is a reason to allow them to go belly up, but it’s a position. But let’s also remember Chicago can keep property taxes lower because, well, it’s Chicago and it has advantages that a lot (all) of suburbs don’t. Someone living in the ‘burbs complaining about Chicago property taxes gets zero sympathy from me: nothing is stopping you from living in Chicago after all.

But we also need to look at the flip side of things: CPS doesn’t get all that much money from the state.

CPS has made hundreds of miss steps since it was granted mayoral control. But property taxes (capped by PTELL remember) is pretty low on that list.

Comment by From the 'Dale to HP Tuesday, Aug 11, 15 @ 12:39 pm
RNUG - respectfully I ask, are you sure? I ask this because if the Corporate Income Tax can have a Replacement Tax add on, why can’t we have an Equitable Wage Tax? It is a flat surtax that only involves wages. I respectfully ask, if corporations are supposed to have just one tax, didn’t the replacement tax let a genie out of the bottle? An argument can be made that this is not an income tax it is a wage tax that equalizes or flattens the tax of wage earners in Illinois. Come to think of it… I believe it would be easier to defend than the Replacement Tax since the RT rate has nothing to do with a corporations personal property. But I would truly like your opinion about where and why it needs the Constitution to be amended.

Comment by Triple fat Tuesday, Aug 11, 15 @ 12:53 pm
If (when) the pension funds default, is anyone on the hook? For the municipal pension plans Chicago’s only obligation is to make the required payment. One of the ‘enhancements’ that Emmanuel was offering in his pension reform plan was that the City would be on the hook for the pensions. I’m not sure what the situation is for the CPS pensions - are they backed by any entity?

Comment by MidwayGardens Tuesday, Aug 11, 15 @ 1:28 pm
But we also need to look at the flip side of things: CPS doesn’t get all that much money from the state.

Yeah, only about 1,300 per student more than my suburban district does

CPS revenue from the state 1,834,500,000
with 396,683 students or $4,623.34 per student

http://cps.edu/fy16budget/Pages/revenue.aspx

Vs my district

57,704,309 from the state for 17,163 students

or $3,362 per student (actually lower since I am using 2013 enrollment numbers and we add 500+ kids a year)

http://www.oswego308.org/assets/5/documents/OCUSD_308_FY15_final_approved_budget_(C).pdf

Would be happy with your ‘not much’ per student.

Yeah that may not include the pension payment for my district, but lets not act like Chicago is getting ripped off by the state.

Comment by OneMan Tuesday, Aug 11, 15 @ 1:44 pm
===that may not include the pension payment===

It also doesn’t include the fact that CPS’ student population is a whole lot poorer than your district.

They ain’t making out like bandits here.

Comment by Rich Miller Tuesday, Aug 11, 15 @ 1:46 pm
“….. why can’t we have an Equitable Wage Tax? It is a flat surtax that only involves wages. ……An argument can be made that this is not an income tax it is a wage tax….”

You might hurt yourself while engaged in the verbal gymnastics explaining why wages are not income.

Comment by CapnCrunch Tuesday, Aug 11, 15 @ 1:54 pm
Captain - the way I see it the Equitible Wage Tax flattens the total tax obligation tied to the wages of wage earners in Illinois. It is a surtax directly tied to the FICA cap on wages. It flattens tax obligation. You know Raum Bruce are fond of saying, ‘You never let a serious crisis go to waste.’ I say, Never let an inequity go unaddressed. See Captain easy peasy.8

Comment by Triple fat Tuesday, Aug 11, 15 @ 2:08 pm
I can guarantee one thing, if Illinois adopts the Equitible Wage Tax (EWT) other states will follow. If enough states participate maybe Congress will lift the cap and save Social Security for an additional 75 years. As long as we get 3 or 4 years that’ll be a win win.

Comment by Triple fat Tuesday, Aug 11, 15 @ 2:18 pm
Oswego: 26% low income; CPS: 86% low income.

This issue though is the pie is too small when it comes to state funding…

Comment by From the 'Dale to HP Tuesday, Aug 11, 15 @ 2:26 pm
The Chicago power structure doesn’t want to pay for the city’s schools because they literally have no skin in the game.

Their kids don’t go to the schools.

Comment by Wordslinger Tuesday, Aug 11, 15 @ 2:39 pm
$19 a year? And people will beef about it. Take a look at what taxes in some suburbs are. Double Chicago’s. I know they may get better services in some cases but a slight increase like that wouldn’t kill anyone and it could help get out of the debit crater.

Comment by Middle class mel Tuesday, Aug 11, 15 @ 3:47 pm
Property taxes aren’t equitable. Just sayin

Comment by Triple fat Tuesday, Aug 11, 15 @ 4:13 pm
-Joe M-

I don’t have the information you asked about but the Cook Co. clerk says the average tax bill for a house with a market value of $199,000 in Chicago is $3,327. In Urbana the tax on that house would be $6,396.

Comment by CapnCrunch Tuesday, Aug 11, 15 @ 5:48 pm
There’s no doubt property taxes will be increased in Chicago for the foreseeable future. However, the real dilemma is how CPS is going to end up paying for their pension obligations. If Claypool and company assumes the teachers union is going to allow CPS to stop pension contributions, he’s in for a rude awakening. Regardless of what Rahm and Rauner agree upon in reference for state aid and teachers picking up their pension cost, it still a matter for the democratic chambers to decide. Madigan & Cullerton are not going to agree to some pension reform that that strips labor of their pension deal with Chicago because its seen as a trojan horse for Rauner to opening the flood gates to undermining collective bargaining rights. Plus please correct me, but isn’t pension contributions also protected under the Illinois Constitution since it states that benefits can be diminished (meaning to include CPS pension contributions of 7%) ?

Either way the city needs to increase their property taxes, increase their sin taxes (Liquor etc), increase taxes on candy & soda, increase taxes on fines, fees, tourism, close out all TIFFS and get a casino if theres any hope for them to pull this off.

Comment by Deputy Dog Tuesday, Aug 11, 15 @ 6:42 pm
@- CapnCrunch - Tuesday, Aug 11, 15 @ 5:48 pm:

-Joe M-

I don’t have the information you asked about but the Cook Co. clerk says the average tax bill for a house with a market value of $199,000 in Chicago is $3,327. In Urbana the tax on that house would be $6,396.=============

Sorry, Cap’n, but I would like to see an address with that tax bill in Urbana. I have friends with an owner-occupied exemption who aren’t paying that much. Your figure seems more in line with a rental (no homestead exemption) at a higher price point.

Comment by Lynn S, Wednesday, Aug 12, 15 @ 12:51 am
-Lynn S-

I used a property in SE Urbana. I used my tax form and filled in the columns as follows:

Estimated Fair Cash Value. $199,000
Equalized value (33.3%). $66,333
Corrected value. $66,333
Homeowner exemption. -$6,000
Adjusted equalized value. $60,333
Tax rate. 10.6011%
Total tax due $6,396

Comment by CapnCrunch Wednesday, Aug 12, 15 @ 6:40 am
Cap’:

Do you own this property, or is it one you selected because you know the folks who own it?

When you look up properties via the Champaign County Assessor’s website, the individual property information page also has a link on it that takes you to a page that shows the real estate taxes paid on that property for the last 4-5 years (County Treasurer’s website).

I’d be curious to see the address of the property you used.

You do realize for $6000 in real estate taxes, you get a LOT MORE house in Champaign, right?

Comment by Lynn S, Wednesday, Aug 12, 15 @ 12:10 pm
“You do realize for $6000 in real estate taxes, you get a LOT MORE house in Champaign, right?”

Right, their tax rate is only 8.5423%. Any property in the area I used would pay the same taxes as I do because they are in the same taxing district. Same township, mass transit, schools, park district, etc. That’s why I used my tax form.

Comment by CapnCrunch Wednesday, Aug 12, 15 @ 2:30 pm