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After refusing to indicate whether he would raise taxes in Chicago during his last campaign, Mayor Rahm Emanuel announced yesterday that he intends to seek the City Council’s approval on a provision to hike Chicago’s property tax to make up for budget shortfalls.
The tax, which would rake in an estimated $588 million for city coffers over the next four years, is the highest proposed hike in Chicago’s history. And it comes with several other revenue-generating sister provisions, from propositions instituting higher fees for garbage pickup and building permits, to new taxes on electronic cigarettes and ride-sharing services like Uber.
The mayor’s acceptable choice: increase property taxes by a record $588 million over the next four years to shore up police and fire pensions, and approve an unprecedented series of other fee and tax increases to help close the city’s yearly budget shortfall. The other hits to Chicagoans’ wallets range from a new garbage-hauling fee and building permit fee increases to a new tax on electronic cigarettes and ride-sharing and taxi fee increases.
“I know this budget’s tough and therefore I know it carries political risk. I get it,” Emanuel told aldermen in a 33-minute speech, short by his standards. “But there’s a choice to be made, make no mistake about it. Either we muster the political courage to deal with the mounting challenges we inherited, or we repeat the same practices and allow the financial challenges to grow.”
The reception was, fortunately for Chicago pocketbooks, “tepid,” according to the Tribune, but the proposition is, itself extreme, designed to encourage participation from City Council members in a legislative solution. With Emanuel firing the first volley, it’s likely that the Council will simply decide that a tax hike is inevitable and work with the mayor’s office to make the fees more palatable to an already overtaxed Chicago citizenry. The only shining light: while the mayor is not up for re-election for several years, City Council members will have to face voters in a shorter term. And they will likely face voters with anywhere from $350 to $550 less in their pockets.
The proposition also comes ahead of an annual event, where City Council members are allowed to audit and question city expenses. Typically, as the Tribune points out, this doesn’t result in much cutting, after all, a cut to another aldermanic district usually means cuts to one’s own aren’t far behind.
No matter what, some changes must be made. Thanks to a previous gubernatorial administration, Chicago is facing a massive hike on contributions to police and fire pension funds, and the city is too poor to make the payments without either taking massive cuts or accepting a massive tax hike. A competing bill, that would give Chicago some breathing room before increased payments come due, hasn’t yet grabbed the new administration’s attention, as they struggle to handle state-based budget woes of their own.
Across the board, Illinois is struggling, but it’s unlikely that raising property taxes to this level will help to improve the economy in the long term, though it may correct some budget constraints in the short term. Chicago would do better to dig deep into the books and change the way the city does business.