Emanuel to Call for Largest Property Tax Hike in Modern Chicago History

Mayor Rahm Emanuel is expected to call for the largest property tax increase in modern Chicago history as part of a plan to raise money for a pension payment for police and firefighters next year.

Emanuel is considering a property tax hike between $450 million and $550 million, but a final number has not yet been set. If approved, the average homeowner would pay at least $500 more a year.

In addition to the potential property tax hike, Emanuel also reportedly plans to push a garbage collection tax and possibly new fees for e-cigarettes and taxi and ride-hailing services.

A preliminary budget released last month showed a gaping budget shortfall for 2016 that could grow to $754 million and beyond, a total that is so high that some said it could force Emanuel to raise property taxes.

After a Cook County judge threw out a law aimed at reducing multibillion-dollar shortfalls in the two pension funds, Emanuel pinned his hopes on the state Supreme Court to reverse that decision. At the same time, the $328 million in payments to police and fire pension funds could grow to well over a half-billion dollars if Republican Gov. Bruce Rauner does not sign legislation to give the city more time to increase contributions to the funds.

"It is very difficult to see how the city could come up with $328 million increased contribution to the pensions without a significant increase in the property tax and/or the sales tax," said Laurence Msall, president of the Civic Federation, a budget watchdog group.

Emanuel has not ruled out a property tax increase. At the same time, the city is scrambling to find ways to bring in more money, with aldermen making suggestions that include adding a tax to sugary beverages, extending the cigarette tax to smokeless tobacco and charging for garbage pickup.

Winning over the aldermen to get them to approve his tax hike may be challenging.

Alderman Carlos Ramirez Rosa said he wants to see the council partake in sacrifices, adding that “it’s time that the city council cut our six-figure salaries.”

Emanuel has dispatched his budget director, Alexandra Holt, to meet with the city's inspector general who in the past has recommended a host of ideas to cut costs, including reducing firetruck staffing and requiring all city documents be printed on two sides.

Msall said for Emanuel and the City Council it is "also a reality that they are going to need new tax revenue" even if the city follows all the recommendations of the aldermen — a few of whom have even wondered about legalizing and taxing the recreational use of marijuana.

Emanuel, Holt and Chief Financial Officer Carole Brown are expected to speak with Chicago residents Thursday in the last of three public budget forums held this week.

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