Latest Post | Last 10 Posts | Archives
Previous Post: They got me
Next Post: Question of the day
Posted in:
* Greg Hinz reports on Mayor Rahm Emanuel’s supposed pension reform “deal.” It’s a whole lot more expensive than advertised…
Crain’s and other outlets reported this morning that the city’s property tax levy would go up $250 million over the next five years to pay for the deal. The figure came from briefings by city officials, officials who stuck with that figure even when repeatedly challenged.
But this morning, citing “confusion” amid a flurry of announcements and briefings, a city spokeswoman conceded that, in fact, the tax hike will be $750 million over five years.
Specifically, the city now says, the city’s property tax levy will rise $50 million in 2015, and keep rising by an additional $50 million a year over the following four years. Thus, the city’s gross property levy will be $50 million higher in fiscal 2015 than it is now, $100 million higher than now in 2016, and so forth, reaching a level $250 million higher than now in five years.
Thus, over the five years cumulatively, the city would pull in $750 million more for worker pensions than now. That’s somewhat different than the $250 million tax hike over five years” that was widely reported today.
posted by Rich Miller
Tuesday, Apr 1, 14 @ 12:32 pm
Sorry, comments are closed at this time.
Previous Post: They got me
Next Post: Question of the day
WordPress Mobile Edition available at alexking.org.
powered by WordPress.
That’s a pretty big mistake for the Spin Doctor to make.
Comment by James the Intolerant Tuesday, Apr 1, 14 @ 12:38 pm
Oops.
The folks that Rahm ran out there seem rather challenged by the arithmetic.
Geez, how can you be that weak on elementary math when you’re asking for that much money?
Maybe they should do their work in pencil and check it next time before a press conference.
Comment by wordslinger Tuesday, Apr 1, 14 @ 12:39 pm
That’s not the worst of it. The City and the media are ignoring the staggering cost increase that coming down the pike as a result of the Police and Fire pension increases. Add that $600m on going increase over the next five years and you have a $3.75 billion dollar increase over 5 years. Where is that money coming from Rahm?
Comment by Bogart Tuesday, Apr 1, 14 @ 12:51 pm
Aggregate Schmaggregate. Was the $290 over five years correct?
Comment by PublicServant Tuesday, Apr 1, 14 @ 12:51 pm
Ah, compounding “interest”. Kinda like a COLA.
Comment by thechampaignlife Tuesday, Apr 1, 14 @ 12:52 pm
And on top of that the park district and the schools will be adding to the Chicago tax bills for their share of pension. Plus the city will be back for more for police and fire pension along with city operating costs which will be climbing. What will be the impact all together?
Comment by But yet Tuesday, Apr 1, 14 @ 12:56 pm
Maybe the journalists got it wrong? It does seem like the City will gradually raise the tax levy $250 million dollars higher than it is now over the course of the next five years. That will obviously add up to more than $250 million dollars when the increased amount collected each year is added up.
Comment by Chi Tuesday, Apr 1, 14 @ 1:03 pm
$750 million? That’s a lot of yogurt.
Comment by 47th Ward Tuesday, Apr 1, 14 @ 1:04 pm
Okay, so does that also mean that the “average homeowner” quoted in the other post will see a property tax increase of $750 instead of $250 over the five years? My head hurts today, but it seems like one follows the other
Comment by Arthur Andersen Tuesday, Apr 1, 14 @ 1:08 pm
The chickens are coming home to roost for those of us with more expensive homes in the City. Once the tab for everything is completed I suspect Chicago’s total property taxes will end up on the higher end of the average tab in Cook county.
One immediate impact I suspect will be a down turn in the building of $1 million plus single family homes on the north side/ near loop west and south sides of the city and very expensive conversions of two flats into $1 million plus homes. All good things have to come to an end.
Comment by Rod Tuesday, Apr 1, 14 @ 1:12 pm
Lots of fuzzy math going on. My adding machine says $150 million for 5 years.
Oh well Rahms a Cub fan years and years of suffering means its normal.
Comment by Mokenavince Tuesday, Apr 1, 14 @ 1:13 pm
City property owners pay the lowest property taxes in the state. Their tax rate is 50% lower than northwest Cook. Even with the Rahm hikes City residents will pay less than the rest of us.
Comment by Anon Tuesday, Apr 1, 14 @ 1:13 pm
===I suspect Chicago’s total property taxes will end up on the higher end of the average tab in Cook county.===
You clearly have no idea how much higher taxes are in, say, the southland.
Comment by Rich Miller Tuesday, Apr 1, 14 @ 1:14 pm
Yes Chi, in this case Greg Hinz is the elementary math failure. If the property tax levy was increased $250 million all at once, rather than phased in over five years, the total extra amount of property tax collected over the following five years would $1.25 billion. The City is correct in saying that the levy is being raised $250 million. To get to the $250 million Hinz thinks the increase needs to SUM to over the five years, the City would have to only raise the levy $50 million and leave it at that level going forward. Only there do you get a sum total of $250 million over five years. (And $275M over 6 and so forth).
Comment by Hannah Errant Tuesday, Apr 1, 14 @ 1:23 pm
Good plan on raising property taxes in Chicago.
Chicago homeowners enjoy some of the cheapest property taxes in Illinois.
The time for an increase is well past due.
Comment by Anon Tuesday, Apr 1, 14 @ 1:39 pm
copied from the other pension thread …
Read this story late last night / early this morning. I probably had a bit different take on it than a lot of you.
Other than the fact it isn’t a done deal, I had to admire the way it was structured. Everyone pays some and Rahm gets to defer a payment a lot of years. Brilliant (and yes, I’m being somewhat sarcastic)! It’s a good enough mix it could get passed if done quickly. I realize a bill hasn’t been drafted yet and the devil is in the details, but I see it as a pre-emptive strike by Rahm who well knows the COLA and work rule changes will most likely be struck down by the ISC (which is why it needs to be passed NOW before the SB0001 ruling comes down). I think Rahm doesn’t care if that part gets tossed out because he will have gotten his tax increase and his payment deferment (about 70% of his wish list), both of which he really needs.
Comment by RNUG Tuesday, Apr 1, 14 @ 1:45 pm
Maybe this is just an April Fools joke from City Hall? Those numbers from yesterday… APRIL FOOLS!!!!
Comment by From the 'Dale to HP Tuesday, Apr 1, 14 @ 1:49 pm
City of Chicago equalized assessed value (EAV; After all multipliers) is $65,250,387,267 (2012 tax year).
The number does not include SSA (Special Service Area) values, but it might include TIF (Tax Increment Financing) increment value, which would need to be deducted. Can’t tell from the Clerk report.
So, if the actual taxable EAV for Chicago is $65 bil, that means a tax rate increase (per year) of approximately:
IF $50 mil per year…. .0766 per $100 of taxable value
-IF- 5 years, the tax rate increase for year 5 (over year 0) would be approx. $0.383 per $100 of taxable value. That’s assuming no changes in taxable value, etc., etc.
IF $250 mil per year…. .3831 per $100 of taxable value. I’ll let you do the calc. for this one.
Remember, these numbers represent a single ‘per year’ calculation. If the tax rates are going up that much for each year, start adding.
Comment by Judgment Day (Road Trip) Tuesday, Apr 1, 14 @ 2:02 pm
Every newspaper needs a finance person to review anything before it gets posted. They’re just looking for large numbers to shock people rather than how much the hike will be and are confusing with how much it will raise. By their math any tax hike is infinite because it can be extrapolated to eternity… So stupid.
Comment by PMcP Tuesday, Apr 1, 14 @ 2:25 pm
I think its time to pass that gaming bill. It will take a couple of years to get up and running but they could postpone some pain by doing it now.
Comment by Been There Tuesday, Apr 1, 14 @ 2:52 pm
Now, that average $750 increase over 5 years doesn’t make for a good campaign mailer for Rham.
Comment by Downstater Tuesday, Apr 1, 14 @ 3:23 pm
Luckily, the job market is buoyant, and wages are increasing for everyone. This will easily be absorbed. Right?
Comment by Cook County Commoner Tuesday, Apr 1, 14 @ 3:33 pm
Didn’t Blago try that kind of math? Save a $1M this year, and $1M next year, you’ve saved $3M.
Comment by Skeptic Tuesday, Apr 1, 14 @ 4:18 pm
Details, details.
These folks are big picture thinkers.
Comment by Sir Reel Tuesday, Apr 1, 14 @ 4:26 pm
Where is the discussion of TIFs????? They take in $500 million per year. If everyone needs to share in the sacrifice why aren’t we starting at the political goodies doled out under the TIF program?
Comment by truthteller Tuesday, Apr 1, 14 @ 4:31 pm
Rich actually I do have an idea of what the property tax rates are in south suburban Cook, Rep Will Davis has made that point repeatedly in committee. But the tax rates particularly in suburbs like Robbins are well above the average rate in Cook County. Harvey I think has the highest effective property tax rate in the county. Currently the City of Chicago has one of the very lowest effective property tax rates in Cook County at least according to the Civic Federation.
So Chicago can easily go to the high average range and not be anywhere near Harvey or many other south suburban communities.
Comment by Rod Tuesday, Apr 1, 14 @ 4:58 pm
RNUG Does this deal Rahm worked out apply to retirees also? If so it won’t be long after a bill passes before a suit is filed by a retiree who will say the unions can’t bargain away their constitutionally protected pension.
Comment by Pacman Tuesday, Apr 1, 14 @ 6:52 pm
If the Unions will not come to the table in good faith, then why don’t we let the whole thing implode.
Either way, the trough is going to run empty.
Comment by DuPage Moderate Tuesday, Apr 1, 14 @ 9:03 pm
- Pacman - Tuesday, Apr 1, 14 @ 6:52 pm:
I have to rely on the newspaper articles to get the details right, but it is reported to also affect retirees in the articles Rich linked to, including the one I read early this AM.
BTW: I don’t know if this is exactly what was actually said, but I loved this line in the one version of the Crain’s story:
The agreement does not require the approval by union members, a spokeswoman for Mayor Rahm Emanuel said.
———
This proposal is guaranteed to be challenged in court immediately upon passage.
Comment by RNUG Tuesday, Apr 1, 14 @ 9:12 pm
If this is a step towards the city operating within its means is A good thing
Comment by Plutocrat03 Tuesday, Apr 1, 14 @ 9:52 pm
Former (non-unionized) City employee here. Tell Rahm I would be happy to run to the courthouse and file my own lawsuit pro se even if unions sell out retirees and near-retirees.
Comment by Cold Tuesday, Apr 1, 14 @ 11:43 pm
Once the courts get done with this particular attempt at pension theft, people have two choices:
(1) Pay
(2) Move
Pick one.
Comment by PublicServant Wednesday, Apr 2, 14 @ 6:39 am
According to today’s Sun Times story, at least one union leader agrees with me. Bill Dougherty, acting president of the Fraternal Order of Police:
“It’s totally against the state constitution. Your benefits cannot be diminished,” Dougherty said. “There was something passed for state employees. That’s already being challenged. The mayor is rushing to get something done before that challenge comes through because he knows it’s gonna be declared unconstitutional.”
Comment by RNUG Wednesday, Apr 2, 14 @ 8:02 am