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Mayor’s graduated real estate transfer hopes are dimming

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Illinois

* Press release…

Chicago Mayor Lori Lightfoot has yet to respond to a proposal that would produce a “win-win” outcome for both her and a faction of lawmakers currently opposed to her bid to obtain state authorization to increase the city’s tax on property sales.

The attempted compromise would modify Lightfoot’s proposal to raise the rate of Chicago’s Real Estate Transfer Tax on sales of elite properties, yielding sufficient revenue to boost city funding to provide affordable housing for Chicagoans experiencing homlessness– a plan the Mayor promised to support during her campaign for office – without diminishing revenues she said she needs to trim the budget deficit.

Under the concept presented to the Mayor last week, the city would adjust the graduated structure of Lightfoot’s RETT increase by 1.) changing the rate for property sales worth more than $10 million from the 2.55 percent that Lightfoot proposed to 4 percent, with the rate applying only to the portion of the sale over $10 million, not the entire sale; and 2.) apply the rate that Lightfoot has proposed for properties sold for between $1 million and $3 million to those also sold for more than $750,000. The counter proposal also ensures that any property sold for less than $800,000 would receive a tax cut. This equates to roughly 70% of property transactions in the city.
State lawmakers who devised the compromise sought to work together with the Mayor’s administration to advance the idea, but their overture has elicited no response.

“I can’t emphasize enough that we see this proposal as a “win-win” opportunity for everyone,” said Representative Thersea Mah “It leaves the money that Mayor Lightfoot had budgeted to curb the deficit unscathed, but it also honors her campaign commitment to support a dedicated revenue stream to combat homelessness by investing in permanent, supportive housing. This is what our city desperately needs after generations of chronic under-funding at the city level.”

During her campaign for office, Lightfoot repeatedly promised to seek a RETT increase exclusively to address glaring housing needs in the city. Advocates with the Bring Chicago Home (BCH) coalition have pressed the Mayor to uphold her promise and last week, 13 state lawmakers – including 10 representing districts that include areas of the city – cautioned Lightfoot that they could not support her quest for legislative approval of a RETT increase unless the Mayor made good on that pledge.

Lawmakers pointed out that their proposed amendment to the RETT increase would meet the Mayor’s goals for shrinking the budget deficit – ostensibly sparing her any need to consider a property tax increase – while concentrating the impacts on a small fraction of the city properties sold at high to ultra-high prices.

* Greg Hinz…

But the move may not be enough to save Lightfoot’s proposal, which faces deep opposition in Springfield. […]

Either way, I’m hearing Lightfoot’s plan still is in trouble, facing opposition both from Republicans and real estate groups that oppose tax hikes, and from downstate and suburban Democrats who see no reason to take a tough vote even if progressives may be climbing aboard. […]

If Lightfoot doesn’t get action from the General Assembly in the veto session, she’s strongly hinted she’ll instead have to raise property taxes at least $50 million in 2020. The tax would be implemented at midyear, and eventually pull in $100 million a year. Lawmakers return for the veto session Nov. 12 through 14. After that, they’re not back in session until January.

I heard maybe 20-something votes in the House today. It’s gonna be a tough climb.

posted by Rich Miller
Wednesday, Nov 6, 19 @ 2:59 pm

Comments

Serves the “progressives” right. Now all property owners will get taxed more.

Comment by AnotherAnon Wednesday, Nov 6, 19 @ 3:02 pm
” a tough climb” is an understatement .. alas.. my property taxes are going up again in Chicago..

Comment by NotRich Wednesday, Nov 6, 19 @ 3:03 pm
=Serves the “progressives” right=

another problem solver heard from. /s

Comment by JS Mill Wednesday, Nov 6, 19 @ 3:04 pm
Mayors Own. Sounds like another failure by the Mayor to get her agenda items passed in Springfield.

Comment by RIP Bernie Epton Wednesday, Nov 6, 19 @ 3:05 pm
Lightfoot’s progressives should just wait for President Warren- she has a plan to eliminate the homeless problem. LOL

Comment by Sue Wednesday, Nov 6, 19 @ 3:08 pm
This Mayor’s Office and Crew lack.

They just do. Embarrassingly so. “Why?”

They continually put the Mayor is such tight windows of success and they ignore that the Mayor is more likely to hurt or blow up your hard work then drag it across the finish line.

Utter amateurs are concerned about winning the wordy press releases and forget it’s about 60/71, 30/36 and signature.

They are, for me, arguably, the worst governing/political operatives I’ve probably seen. Rauner was bad, but purposely bad to inflict pain. These folks are *trying* to be this bad by the choices they make to move policy and attempt governing.

Comment by Oswego Willy Wednesday, Nov 6, 19 @ 3:15 pm
Is it possible that no-one on her staff is telling her the truth about how the Legislature works regarding “tax votes”?.. Is it possible no-one on her staff knows how things in Springfield work? Too many progressive policy wonks, and not enough practical vote counters

Comment by NotRich Wednesday, Nov 6, 19 @ 3:31 pm
“ Is it possible that no-one on her staff is telling her the truth about how the Legislature works regarding “tax votes”?.. Is it possible no-one on her staff knows how things in Springfield work? Too many progressive policy wonks, and not enough practical vote counters”

I think there may be some of that, but more that the Mayor doesn’t listen.

Comment by Montrose Wednesday, Nov 6, 19 @ 3:37 pm
=== I think there may be some of that, but more that the Mayor doesn’t listen.===

Amateurs.

They all be way over their heads, in so far… no one seems to trust anyone with the truth of what is going on.., or how to move forward.

Amateurs do that.

Comment by Oswego Willy Wednesday, Nov 6, 19 @ 3:40 pm
Ah yes the city of big shoulders, that needs a state bailout to cover a growing $838 deficit.

Comment by Donnie Elgin Wednesday, Nov 6, 19 @ 3:45 pm
How do you not respond to people whose support you need for your proposals? If you’re not ready to say “yea” or “nay”, you at minimum acknowledge that you’ve received the communication and are looking at it.

This makes no sense.

Comment by JoanP Wednesday, Nov 6, 19 @ 3:45 pm
=== I think there may be some of that, but more that the Mayor doesn’t listen.===

Also, maybe she should stop yelling “Off with their heads!” when people bring her disappointing news.

Look, the mayor and her crew were telling themselves and telling others that they had a 50-ward mandate to do whatever they wanted. She has acted that way since Day One. Dictating to the city council. Dictating to the legislature. Dictating to the unions. Dictating even to the governor.

That’s not how intra-party leadership works.

And every time she fails, she looks weaker, and her demands carry less and less weight.

Comment by Juvenal Wednesday, Nov 6, 19 @ 3:46 pm
I get why Chicago reps may be against it because they have own ax to grind. I do not get why anyone downstate would care. In fact if they are anti Chicago I would think they would vote for it so Chicago Democrats would fight against them selves

Comment by DuPage Saint Wednesday, Nov 6, 19 @ 3:50 pm
===I do not get why anyone downstate would care===

Slippery slope argument from Realtors and other opponents. If they do it for Chicago, they may be asked to do it Downstate.

Comment by Rich Miller Wednesday, Nov 6, 19 @ 3:52 pm
Lightfoot should more directly threaten to withhold citywide support for JB’s fair tax.

Comment by Donnie Elgin Wednesday, Nov 6, 19 @ 3:56 pm
“Lightfoot should more directly threaten to withhold citywide support for JB’s fair tax.”

That’s snark, right? Please tell me that is snark.

Comment by Montrose Wednesday, Nov 6, 19 @ 3:56 pm
=== Lightfoot should more directly threaten to withhold citywide support for JB’s fair tax.===

So she can cut off her nose to spite her face?

Chicago needs that new revenue from the Progressive tax.

Also?

Governors > Mayors

Lightfoot has no real leverage, especially with a governor who proved he’d spend $300K a day for something he wants.

Hope you’re not advising the mayor, lol

Comment by Oswego Willy Wednesday, Nov 6, 19 @ 4:01 pm
===Lightfoot should more directly threaten to withhold citywide support for JB’s fair tax===

Yep. That’ll help get EVERYTHING she wants passed. Right. Go with that, Bruce.

…and then they can name the flat tax hike after her in 2021. lol

Comment by Rich Miller Wednesday, Nov 6, 19 @ 4:14 pm
JB could have raised far more new revenue raising the flat tax to 5.5 or 6 and afforded everyone below 40 K a new exemption. With the additional corruption in the news everyday the Fair Tax outcome is hardly guaranteed.

Comment by Sue Wednesday, Nov 6, 19 @ 4:28 pm
=== JB could have raised far more new revenue raising the flat tax to 5.5 or 6 and afforded everyone below 40 K a new exemption. With the additional corruption in the news everyday the Fair Tax outcome is hardly guaranteed.===

If the *voters* decide to reject the progressive tax…

You don’t want the voters to decide?

Comment by Oswego Willy Wednesday, Nov 6, 19 @ 4:29 pm
OW- your missing the point of my text- JB needs more then the 3 B his proposal looks to raise. He already spent nearly 800 million for the pension miscalculation his team made. The only way to raise the revenue the BEAST seems to need is with a bump on taxes 90 percent of us pay not the 3 percent his fair tax is aimed at

Comment by Sue Wednesday, Nov 6, 19 @ 4:36 pm
The progressive tax is going to fail when Chicago raises property taxes and everyone realizes they can’t deduct them via SALT. Every dollar of additional SALT tax hurts compared to the old deduction.

It’s going to be tough to ask for a progressive income tax during a federal raid.

Comment by Bad Politician Wednesday, Nov 6, 19 @ 4:38 pm
The best way to fight homelessness is to bring more jobs to Chicago. Raising taxes does not meet that goal.

The best way to provide more affordable housing is to increase the supply of housing. Raising taxes on those who provide housing does not meet that goal either.

Comment by Just Me 2 Wednesday, Nov 6, 19 @ 4:42 pm
=== JB needs more then the 3 B his proposal looks to raise.===

So scrap the progressive income tax altogether?

How is that good politics?

They’ll need to figure on how to raise the revenues within the politics and governing too…

… not just the math.

=== It’s going to be tough to ask for a progressive income tax during a federal raid.===

Hey Nostradamus, lemme know when we can legally get on that and the odds, we’ll be millionaires.

Comment by Oswego Willy Wednesday, Nov 6, 19 @ 4:42 pm
=== The progressive tax is going to fail when Chicago raises property taxes and everyone realizes they can’t deduct them via SALT. Every dollar of additional SALT tax hurts compared to the old deduction.===

“97% of Illinois tax payers won’t lose a dime more than last year.”

Get use to that phrase. I’m guessing millions will be spent to drawn out the Negative Nellies.

Comment by Oswego Willy Wednesday, Nov 6, 19 @ 4:44 pm
The mayor should have allied herself more closely with the Municipal League on this and some of her other asks. How about a bill that allows any municipality (not just Chicago) to pass an ordinance enabling graduated rates on transfer taxes as long as the additional revenue goes to retire pension debt? That might have been difficult to pass as well, but they could have sold it as a statewide property tax reduction plan.

Comment by BC Wednesday, Nov 6, 19 @ 4:47 pm
Related: liberal legislators do not respond to threats of tax increases. They do respond to budget cut threats though.

Comment by Just Me 2 Wednesday, Nov 6, 19 @ 4:48 pm
It may be 97% in year one.

But the brackets aren’t indexed to inflation and will consume more taxpayers every year.

Comment by Bad Politician Wednesday, Nov 6, 19 @ 4:52 pm
- Bad Politician -

1) Voters don’t do nuance

2) You going to have the spending power to defeat that messaging?

It’s going to be a high bar to pass it, let’s not think it’s a slam dunk, easy, or done… but those working against it and the governor, and the populist angle of this…. um, ok…

Comment by Oswego Willy Wednesday, Nov 6, 19 @ 4:55 pm
The city of Chicago voted overwhelmingly for amateurs because the true professionals, who are responsible for the decades long financial quagmire Illinois and Chicago are in knee deep, are under Federal investigation

Comment by Lucky Pierre Wednesday, Nov 6, 19 @ 4:57 pm
Thanks for confirming that it’s only 97% in year one.

Federal raids, Chairmanships for 45-count indictments, airport interchanges to nowhere, and higher property taxes. These things tend to upset people.

Comment by Bad Politician Wednesday, Nov 6, 19 @ 5:02 pm
How does the counter proposal both (a) apply the rate proposed for $1-3 million to sales over $750,000 and (b) “ensures that any property sold for less than $800,000 would receive a tax cut” - when those two seem at odds?

Comment by anon Wednesday, Nov 6, 19 @ 5:04 pm
=== Thanks for confirming that it’s only 97% in year one.==

(Sigh)

I did no such thing. What I said was voters don’t do nuance.

Going into the weeds on issues to undercut the argument via nuance… not the best way.

Now you got it?

=== Federal raids, Chairmanships for 45-count indictments, airport interchanges to nowhere, and higher property taxes. These things tend to upset people.===

Meh.

Mike Madigan is more powerful now, the Democrats are more powerful now, the whole idea of corruption failed Rauner and the Republicans in 2018.

I have a $130 million dollar example, and a whole movie trying to highlight “corruption” how you might be wrong, LOL

Comment by Oswego Willy Wednesday, Nov 6, 19 @ 5:07 pm
=== The city of Chicago voted overwhelmingly for amateurs because the true professionals, who are responsible for the decades long financial quagmire Illinois and Chicago are in knee deep, are under Federal investigation===

Welp, the voters get what they wanted, lol

Comment by Oswego Willy Wednesday, Nov 6, 19 @ 5:09 pm
=== The city of Chicago voted overwhelmingly for amateurs because the true professionals, who are responsible for the decades long financial quagmire Illinois and Chicago are in knee deep, are under Federal investigation===

Explain indicted alderman Ed Burke winning… and not in a runoff?

Take your time.

Comment by Oswego Willy Wednesday, Nov 6, 19 @ 5:14 pm
== “…we see this proposal as a ‘win-win’ opportunity for everyone,” said Representative Thersea Mah ==

If by “everyone” she means Mayor Lightfoot and a dozen progressive legislators from Chicago, I suppose she’s right. But that’s not enough to pass a bill in Springfield.

Comment by Roman Wednesday, Nov 6, 19 @ 5:21 pm
This should pass. One way or another, real estate is going to pay. The transfer tax is more palatable.

Comment by Southwest Sider Wednesday, Nov 6, 19 @ 6:57 pm
==But the brackets aren’t indexed to inflation and will consume more taxpayers every year.==

==Voters don’t do nuance==

Annual tax hikes.

Comment by City Zen Wednesday, Nov 6, 19 @ 7:09 pm
I like making everyone feel the cost of government and corruption. Raise property taxes please.

Comment by AnotherAnon Wednesday, Nov 6, 19 @ 7:11 pm
=== Annual tax hikes.===

Nope. The percentages will remain constant.

They don’t change in percentages from the income until they are changed.

Again, nuance.

Comment by Oswego Willy Wednesday, Nov 6, 19 @ 7:12 pm
==Again, nuance.==

Your answer is nuance. That’s a lot of words to explain (or obfuscate) what is actually happening, which is:

Annual tax hikes.

I can explain in one word what you tried to un-explain in a dozen: inflation

Comment by City Zen Wednesday, Nov 6, 19 @ 8:57 pm
Yet, it’s still true.

97% of those paying taxes will not see an increase.

Your continued fighting for the 3% will be the mistake others will make too… with a man willing to spend $300K a day to win.

“We’re worried about those making $250K and over”

Go with that, lol

Comment by Oswego Willy Wednesday, Nov 6, 19 @ 9:04 pm
Win win for everyone? Meh to mah for that. Add up sales, property and state income. Then add on all the special taxes. Then raise more. Cut spending you greedy pigs.

Comment by 44th Wednesday, Nov 6, 19 @ 10:40 pm
44th, the state and the city have spending problems. Look at CPS. It’s going to cost $1.5 billion over 5 years for about 400 nurses and social workers and CTU raises. CPS should be reducing overall head count as the system has lost 20,000 students the last two years alone.

Comment by AnotherAnon Thursday, Nov 7, 19 @ 7:19 am