Skilled politicians have a way of making bad news palatable. It’s the spoonful of sugar, and it underpins Mayor Lori Lightfoot’s pitch to Chicagoans to conform to her 2023 spending plan.
The dreaded medicine, of course, is another property tax hike.
Last week, Lightfoot announced its budget guidance for the coming fiscal year. She pointed to a budget deficit that was drastically reduced from a year earlier — a projected deficit of $127.9 million, demonstrably lower than the $733 million deficit she forecast for the 2022 budget a year ago .
“As a result of our hard work,” Lightfoot told the city, “Chicago is now on a real path to financial recovery and financial stability.”
That road has potholes, however, and one of them is a proposed $42.7 million property tax hike. The mayor found a curious way to streamline tax collection. “Ultimately, a homeowner with a $250,000 house pays $34 in a year,” she said. “That’s about the price of Al’s Italian beef sandwiches — hot, dunked, and with extra cheese — for a family of four.”
Well, if you put it that way… but wait a minute.
It is wrong to view the rise solely through the prism of its one-time impact over the coming year. For years, property tax hikes have dealt a cumulative broadside for Chicago taxpayers’ pocketbooks. Last year’s budget was the first to include Lightfoot’s move to tie property tax increases to corresponding increases in inflation, resulting in a total property tax increase of $76.5 million. In 2020, she enraged some city councilors by pushing through a $94 million property tax hike.
And then there are the Rahm Emanuel years. In 2015, Emanuel stalked Chicagoans with a record-breaking $588 million property tax hike over four years. To get his pitch to work, he painted a dystopian scenario. Half of Chicago’s fire stations would be closed. The streets of the city would be riddled with potholes, mountains of garbage would pile up, and rats would run through the neighborhoods. “Our city would become uninhabitable,” Emanuel warned.
Rahm probably wants us to thank him for preventing the apocalypse, but years of property tax increases are taking their own toll. They are driving working-class families to the abyss, many of whom eventually choose to move to more tax-friendly cities. They force landlords to pass on the costs to already-struggling tenants, and serve as a last straw for businesses large and small that can no longer afford Chicago’s shrinking tax burden.
Lightfoot’s latest proposal to raise property taxes comes at a time when inflation, now at 8.5%, is putting increasing pressure on Chicagoans’ budgets. The average price of a gallon of gas in Chicago is still around $5, and worries of a full-blown recession have not abated. Another hike in property taxes makes the bleak financial outlook for Chicago residents even worse.
We understand why Lightfoot is downplaying the impact of the property tax hike. She proposes it as she prepares for what is sure to be a contentious mayoral election in February. Property tax increases fall within the realm of third rail policy. Propose a hike and brace yourself for an electoral setback. Don’t be surprised if mayor opponents find ways to pounce on the tax increase proposal when TV campaign ads start hitting the airwaves.
Voters should give Lightfoot high marks for her housekeeping during her first term. She has reduced the deficit and steered the city’s finances through the choppy waters of the pandemic, and is paying the required amount into the city’s four pension funds for the second year in a row.
But voters are unlikely to forget the blow the property tax hikes have taken on their bank accounts. Instead of finding ways to justify another property tax hike, she should look for ways to give taxpayers property tax breaks. That means cutting out unnecessary bureaucracy and pushing for leaner, more efficient city governments.
Otherwise, taxpayers will vote with their feet, as North Side’s Erica Salem announced in a letter we released Monday about Lightfoot’s property tax proposal. “As the perks of living in Chicago become harder to enumerate and property taxes skyrocket making it unaffordable,” Salem wrote, “my family’s only choice is to leave.”
That’s something Lightfoot and the city can’t afford — more Chicagoans are making the choice Salem says she’s making them.
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