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* From the recent campaign…
“Our city faces a housing crisis and raising property taxes would only exacerbate that crisis, leading to a death spiral for our city,” Johnson’s financial plan states.
“As mayor, Brandon Johnson will not raise property taxes on Chicago families. Property taxes are already painfully high.”
* Sun-Times today…
CPS is also issuing its highest allowed property tax increase of 5%, or about $131 million, to help support its budget. Property taxes are the school system’s largest revenue source with state funding still falling about $1.4 billion short. But CPS-issued increases — a routine yearly occurrence — have often gone under the radar compared to those at the city level. […]
Johnson also vowed on the campaign trail that he would avoid raising property taxes that he claimed were squeezing the middle class out of Chicago. But the district is allowed to raise taxes by the lesser of inflation or 5% — and is again doing just that. Inflation this year was calculated at 6.5%, so CPS will take in a 5% — or $131 million — increase. That falls in line with previous years. CPS has raised property taxes every year for the last decade.
Johnson’s senior adviser Jason Lee portrayed the new mayor as powerless to stop the “tax-to-the-max” increase.
“The mayor didn’t appoint a single person on the school board. These aren’t the mayor’s appointees,” Lee said. “At the end of the day, there’s been a budget process that was operated under a different regime with different assumptions. Now, it’s the 9th inning. … This is the end of the budget process.
“This is not an act of the Johnson administration … All we can do is look forward to the elected school board and whatever intermediary board that we have,” said Lee.
posted by Rich Miller
Wednesday, Jun 14, 23 @ 11:26 am
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“district is allowed to raise taxes by the lesser of inflation or 5% — and is again doing just that”
Good old “Property Tax Extension Law Limit”.
Comment by Donnie Elgin Wednesday, Jun 14, 23 @ 11:33 am
Welcome to the hot seat Mayor Johnson. Governing is hard, but I wish you well.
Comment by 47th Ward Wednesday, Jun 14, 23 @ 11:33 am
Seemed to have no issue with bypassing the Board to grant the CTU extra benefits (a reasonable benefit, imo, but should have been bargained, rather than given).
The Mayor is still in control of CPS, so this is the Mayor trying tk have it both ways.
Not a good look.
Comment by Chris Wednesday, Jun 14, 23 @ 11:33 am
If CPS follows the same rules as downstate, the 5% increase is in the levy (the total amount of property tax collected), not the tax rate (% of property value charged to owner). In fact, because inflation has been so high, the levy might increase while the rate goes down.
Neither the newspaper nor the mayor’s office clarified this, but based on the general description provided, it appears to be the case.
Comment by Pot calling kettle Wednesday, Jun 14, 23 @ 11:47 am
Refreshing to hear an elected Democrat actually acknowledge the effect of painfully high taxes, while at the same time maddening he is not willing to do to anything about it.
Comment by Lucky Pierre Wednesday, Jun 14, 23 @ 11:50 am
Already missing Mayor Lori.
Comment by Back to the Future Wednesday, Jun 14, 23 @ 12:02 pm
===painfully high taxes===
Chicagoans need to look at suburban and Downstate property taxes.
Comment by Rich Miller Wednesday, Jun 14, 23 @ 12:04 pm
No it wasn’t me it was the one-armed man
Agreed with Rich, if Chicago went by the 1/3 of assessment like the collar counties instead of 10% of assessed value currently, I’m guessing they’d have all the money they needed.
I wonder what that would look like.
Maybe Johnson’s team can call Fritz and ask for a quote.
I think this would require a 60/30/1 to get that change. But certainly would give Chicago a lot more revenue.
Comment by Frida's Boss Wednesday, Jun 14, 23 @ 12:14 pm
What a laughably weak statement. Despite CPS being a separate taxing body the Mayor still has a lot of control over CPS, as pointed out in the comments above. The Mayor could do more to prevent that large of a tax increase, at the very least by publicly putting pressure on the district. But he won’t do that because he was on CTU’s payroll up until a few weeks ago. This what happens when candidates talk out of both sides of their mouth and no one holds them accountable. First of many to come.
Comment by Boone's is Back Wednesday, Jun 14, 23 @ 12:29 pm
Agreed with Rich, if Chicago went by the 1/3 of assessment like the collar counties instead of 10% of assessed value currently, I’m guessing they’d have all the money they needed.
The state equalizer (3.0027 in 2021) essentially brings residential property to a 33.3% assessment ratio. On the other hand, commercial property, which is assessed at 25% and has the same 3.0027 equalizer applied pays far more than their fare share.
Comment by Timzilla Wednesday, Jun 14, 23 @ 12:34 pm
The property tax increase ceiling became a property tax floor all across Illinois.
It was foreseeable, like “limit two per customer” policies.
Comment by Thomas Paine Wednesday, Jun 14, 23 @ 12:35 pm
Same guy who said “Defunding the police IS A policy. It’s not MY policy.” Johnson doesn’t have a clue.
Comment by Old IL Dude Wednesday, Jun 14, 23 @ 12:40 pm
When comparing taxes between downstate Illinois and chicago, it makes more sense to compare downstate illinois to small cities and rural areas in Indiana, KY, Ohio, etc, to which they compete directly with, and compare Chicago to Dallas, Houston, Denver, cities it competes with. Across the board, taxes are too high. it would be easy to address this by taxing farmers more (they can’t move away) vs taxing commercial real estate (they can move their business elsewhere)
Comment by Merica Wednesday, Jun 14, 23 @ 12:40 pm
It’s not my fault.
Checked notes.. it’s her fault.
Comment by Bruce( no not him) Wednesday, Jun 14, 23 @ 1:10 pm
====
===painfully high taxes===
Chicagoans need to look at suburban and Downstate property taxes.====
I usually don’t bring up this subject with downstaters or suburbanites. But it is always a good comeback when I get asked why I still live in Chicago.
Comment by Been There Wednesday, Jun 14, 23 @ 1:10 pm
The only person who talked about “defunding the police” was Republican candidate Paul Vallis.
Comment by Jerry Wednesday, Jun 14, 23 @ 1:11 pm
==if Chicago went by the 1/3 of assessment like the collar counties instead of 10% of assessed value currently, I’m guessing they’d have all the money they needed.==
Not necessarily. As I wrote above, the increase (and 5% cap) are on the levy, not the rate. Because the levy is the dollars collected, the 5% cap would result in a lower tax rate on the now higher taxed value.
It is important to keep in mind that we do property taxes differently than other taxes and that increasing the levy may or may not result in a tax rate increase.
Comment by Pot calling kettle Wednesday, Jun 14, 23 @ 1:13 pm
=Good old “Property Tax Extension Law Limit”.=
My guess is that you loved it when you first heard about it.
=Across the board, taxes are too high.=
Based on what? Another tired old trope.
When I call the police or Fire dept, they always come. My roads are clear and my schools are good.
Schools fixed costs are increasing at much more than 5% per year. Insurance alone has been moving at a 10% clip or better. Energy? Same thing. And wait until you see what buses cost these days. 25% increase for buses in the last 3 years. If you can get them. 5% is low.
= increasing the levy may or may not result in a tax rate increase.=
Pretty standard actually. Our tax rate dropped by .06 even though our levy went up 6% (we are not PTELL).
Comment by JS Mill Wednesday, Jun 14, 23 @ 1:30 pm
@Pot- I get the 5% cap as all taxing bodies ask for full rate here in the suburbs, whether it meets that 5% increase or not is another story, some years it’ll only rise 3% but each taxing body always asks for the full 5% no matter what.
I guess what I’m not getting though is that in collars, the property tax paid is 1/3 of assessed value? And the property tax paid in the city is 1/10th of assessed value?
It’s how property taxes in the suburbs eclipse property taxes in the city. A $500k house in Beverly is going to pay much lower property taxes than a $500k house in Downers Grove.
If true why doesn’t the mayor just petition to go after 1/3rd assessed value? Just call it a fair property tax?
Comment by Frida's Boss Wednesday, Jun 14, 23 @ 1:39 pm
Frida’s boss, you’re not factoring in the equalization factor, which in practice only really applies to Cook County. (It applies statewide, but for everywhere outside of Cook that factor is almost alway close to 1.0.)
In Cook County, the equalization factor is 3.0027.
So when you take the classifications into account, (10% of AV for residential, 25% for commercial) that ends up meaning that residential properties are tax at 30.027% of their assessed value, and commercial properties are taxed at 75.0675% of their assessed value.
The purpose of this is so that across all properties, taxes are based off of 33% of assessed value, it just is weighed more on business than on residential.
But there is not additional tax revenue to be had by changing the classification system, it comes out in a wash. (Though when talking about economic development, particularly in the south suburbs where the tax rates are also high, that is a whole different discussion.)
Comment by Juice Wednesday, Jun 14, 23 @ 2:01 pm
For years, Mayor Daley didn’t let CPS increase property taxes, effectively making it more and more challenging to meet their annually increasing costs. That’s why CPS raises its property taxes to the max.
Am curious what Mayor Johnson would do to find the additional $131M for CPS. There aren’t many statutorily authorized options.
Also, CPS’ share of the property tax bill is roughly half of what the average Chicagoan pays in property taxes. Nothing else comes close to impacting their bills.
Comment by Immigrants Welcome Wednesday, Jun 14, 23 @ 2:06 pm
**if Chicago went by the 1/3 of assessment like the collar counties instead of 10% of assessed value currently, I’m guessing they’d have all the money they needed.**
Property tax amounts are based on the levy, not the assessment.
If tax changed to being on 1/3 of the assessed value, but the levy stayed the same, the property taxes would (roughly) stay the same.
Comment by JoeMaddon Wednesday, Jun 14, 23 @ 2:14 pm
@Immigrants
1. Daley hasn’t been mayor in 12 years. Kinda weak sauce to throw his name in the property tax increase discussion;
2. CPS gets over $9B and does a sub-par job in improving student performance and outcomes;
3. Johnson said that property tax weren’t going to go up in his administration. They are. He’s mayor. He has to own it.
Comment by Old IL Dude Wednesday, Jun 14, 23 @ 2:25 pm
=Property tax amounts are based on the levy, not the assessment.
If tax changed to being on 1/3 of the assessed value, but the levy stayed the same, the property taxes would (roughly) stay the same.=
Yes and no.
A districts EAV (equalized assessed valuation) and the rate work together to determine how much a district can levy. When the levy is set in December we work off of an EAV estimate from the assessor. We all have various rate caps (each fund is levied for individually. The overall tax rate is determined by combining the individual fund rates).
PTELL districts work differently than non-PTELL districts. PTELL districts levy increases cannot exceed CPI or 5%. But they (with some limitations) can put that in whatever fund they want. They could levy almost everything in the Education fund and zero in other funds so long as the overall levy does not increase by more than the statutory maximum. A bit of a simplistic (and unrealistic) example but it is fine for this discussion.
If the EAV was figured on 33 1/3% of fair market value versus the 10% (really about 16 or 17% with multiplier although this may have increased a little) then the district could levy more because it would be supported by the EAV. In a PTELL district it could only go up a max of 5% without a referendum.
This is the downside of PTELL when inflation is high and real property values are increasing. But, when the opposite is true for values, PTELL. is a guaranteed increase where non-PTELL districts could lose revenue.
Comment by JS Mill Wednesday, Jun 14, 23 @ 2:50 pm
“You campaign in poetry; you govern in prose.”
Comment by Jimmy Hart's Megaphone Wednesday, Jun 14, 23 @ 3:02 pm
@ Old Dude
= Daley hasn’t been mayor in 12 years. Kinda weak sauce to throw his name in the property tax increase discussion;
2. CPS gets over $9B and does a sub-par job in improving student performance and outcomes;
3. Johnson said that property tax weren’t going to go up in his administration. They are. He’s mayor. He has to own it.=
1. Daley forgoing any property tax hike is extremely relevant. That’s 12 years of growth in resources that are completely absent from their base revenue. On the flip side, this is one of those perverse incentives of PTELL - if you don’t raise rates today, you’ll lose out on that revenue forever because the revenue compounds.
2. CPS is actually one of the best urban districts in the country. Stanford University did an entirely independent study based on a national exam (NAEP) and CPS kids were the leaders. Stanford found CPS kids learned five years’ worth of material during four years of instruction. But please keep insulting these kids with stereotypes of failure.
3. Yes, obviously. That’s why I asked what Johnson would do instead to come up with $131M to fund schools. Don’t see him as a guy who’s going to be cutting.
Comment by Immigrants Welcome Wednesday, Jun 14, 23 @ 3:40 pm