Mayor Rahm Emanuel gives residents hard sell on property tax hike
[dropcap]M[/dropcap]ayor Rahm Emanuel is threatening cuts to the city’s basic services if his tax hike plan for next year’s budget doesn’t pass.
“We all know that economic progress has not reached every neighborhood and every resident of the city of Chicago,” said Mayor Emanuel at his Tuesday budget address to the city council. “Our goal as a city must be to help ensure that everyone in Chicago has a chance at a brighter future no matter where they live, and no mater where they come from.”
The mayor’s plan to deal with the city’s fiscal challenges includes the largest single property tax increase in Chicago history, $543 million over the next four years to payoff what the mayor called the “dark cloud” of unpaid police and firefighter pension funds. The total property tax bill on a home worth $250,000 would have risen by nearly $342, to $4,504 had his proposed property tax increase been in effect this year. And over four years that tax bill is expected to increase by more than $550. However residents who own homes valued at $250,000 or less would not pay any property tax increase, according to the mayor’s office.
In addition to the property tax hike, the mayor’s budget proposal also features:
- A garbage collection tax of $9.50 per month per household (this service is currently is covered by other taxes)
- New fees for e-cigarettes that are meant to generate $1 million in revenue in 2016
- New rideshare and taxi fees which are expected to create $60 million next year.
- The proposed 2016 budget also includes a new property tax increase to pay for $45 million worth of construction for Chicago Public Schools.
In his speech the mayor gave residents the hard sell, pointing out that in order to meet the Chicago’s financial obligations without new levies the city would have to layoff 2,500 police officers, 2,000 firefighters, close 48 fire stations, reduce garbage collection from once a week to twice a month. Additionally the city would also completely eliminate the city’s recycling program, rodent control, graffiti removal program, and stop repairing potholes.
The mayor did not mention cutting other services like the Divvy program, which is subsidized by the city’s taxes. The city entered into a controversial five-year $65 million contract in 2012 with ALTA Bicycle Share to operate the bike-share program in the city.
The mayor’s proposed 2016 budget is in stark contrast to the one he presented in October of last year, when he was seeking reelection. Back then he said he was focused on addressing the budget deficit by making city government smaller, smarter and simpler without increasing in property, sales or gas taxes.
“Instead of delivering the ‘progressive’ budget we were promised, Mayor Emanuel unveiled more of the same with a budget proposal that continues to nickel and dime regular Chicagoans via a garbage fee, a massive property tax hike, and rideshare surcharges that amount to a giveaway to his brother – Uber investor Ari Emanuel,” said 35th Ward Ald. Carlos Ramirez-Rosa after the mayor’s budget address.
The City Council’s Progressive Caucus has presented the mayor with various tax revenue ideas like an alternative minimum property tax on buildings in the city’s Central Business District, but it remains unclear how receptive the mayor will be to these ideas before the final budget is voted on next month.
“Every year, the city loses million of dollars in property tax revenue because political insiders are able to cut deals for reduced property taxes on multimillion dollar skyscrapers,” said 45th Ward Ald. John Arena. “Every dollar that the owner of a multimillion dollar skyscraper gets out of paying in taxes gets passed on to homeowners.”
On Monday the aldermen from the Progressive Caucus unveiled a proposal for a property tax rebate for low-income homeowners that would allow households with an adjust gross income of less than 400 percent of the federal poverty level to be eligible for a rebate.
“That it’s definitely something we need. Rising property taxes encourage longtime owners to sell, putting building and homes into the hands of developers, who have no reservations about maximizing rents,” said Noah Moskowitz, of We Are Logan Square. “If you walk around the more gentrified parts of the [Logan Square] neighborhood and talk to folks, you find that the remaining long-term tenants are living in units owned by families or mom and pop landlords. When property taxes go up, these folks most often sell to corporate landlords, who immediately increase rents.”
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