Amid pressure from city leaders and soaring inflation, Mayor Lori Lightfoot's administration announced Thursday that Chicago will forgo a property tax increase tied to the Consumer Price Index for one year.
The city's property tax was set to increase 5 percent without city action, which is the maximum property tax increase allowed by the city. The Consumer Price Index, which the tax increase is connected to, has increased by over 8 percent over the 12 months.
Lightfoot credits the city's lower budget cap than the city has seen in previous years for allowing her administration to forgo the property tax increase. According to Lightfoot's office, a $128 million budget gap is anticipated for 2023.
"Because our economy continues to show better than projected recovery, our city revenues continue to exceed our estimates," Lightfoot said in a statement. "As a consequence, I am happy to announce that we are able to forgo, for one year, the CPI increase on the property tax levy."
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Lightfoot entered the mayor's office as a proponent of tying property tax increases to inflation, citing previous tax increases as sudden and politically motivated.
However, inflation has drastically surged during Lightfoot's term as mayor due to the economic fallout of the COVID-19 pandemic, drastically changing the landscape surrounding a significant property tax increase.
“(Like with) anything else I do, I don’t have any regrets, but obviously nobody anticipated that the CPI was going to explode like it has this year,” Lightfoot said. “Nobody could have anticipated what the consequences of inflation that we’re seeing here this year.”
While announcing the tax relief, Lightfoot also addressed the city's growing pension obligations, long known as a contentious budget issue within Chicago.
"To be clear, our pension obligations are real and continue to grow in the out years. As long as I am mayor, we will never shirk those obligations to our retirees who have every right to depend upon the pensions they earned and we will use all tools at our disposal, including the CPI, in future years, as necessary to meet those obligations," Lightfoot said.