Mayor Emanuel Outlines Proposed Chicago Water and Sewer Tax Hike

Mayor Rahm Emanuel’s administration outlined a recently-drafted water and sewer tax hike that would go into effect in 2017.

Mayor Rahm Emanuel outlined a proposed water and sewer tax hike for Chicagoans that could go into effect in 2017.

According to the mayor’s office, the proposed tax would be used to stabilize the pension fund for Chicago municipal employees and could be voted on by City Council as soon as September.

“This agreement represents an incredible milestone on the road to financial recovery; for the first time in a very long time, every single one of our pension funds is on a path to financial security,” Emanuel said in a statement. “No longer will Chicago sit in the pension penalty box — where our economy is dogged by the decisions of the past and our neighborhood investments live in limbo.”

In 2017, Chicagoans would pay $0.59 per 1,000 gallons based on their water-sewer usage. Current meter rates are $3.81 per 1,000 gallons. The tax rate would then increase by approximately 7 percent annually over the next five years. In 2020 and 2021, the ending tax rate would come to $2.51 per 1,000 gallons of water-sewer usage.

The increase would begin in 2017, generating an expected $56 million that year and approximately $239 million annually by 2020 and 2021. That money would go towards increased funding to the Municipal Employees Annuity and Benefit Fund. The city will seek approval from Springfield for the increased contributions.

Additionally, Chicagoans who don’t pay their water and sewer bills within 24 days would incur an additional interest charge of .25 percent per month.

“These are difficult decisions, and I know the solutions are not easy, but we will finally be honest about the cost of running the city, we will finally be able to confidently invest in our communities, and we will leave Chicago better than we found it for our children and grandchildren,” the mayor added.

The first payments related to Chicago’s recent $543 million property tax hike were due at the beginning of the month. That tax hike is being used to raise money for pension payments to city police and firefighters.

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