Mihalopoulos: Property tax hike looks like a lock

SHARE Mihalopoulos: Property tax hike looks like a lock

Get ready to buck up, Chicago.

The big property tax hike you’ve avoided for so long could be about to happen finally.

As the Chicago Sun-Times first reported Wednesday, the mayor will propose raising an additional $500 million a year through the property tax, mostly to shore up the underfunded city-worker pension funds.

Emanuel is infamous for once referring to immigration reform as the “third rail of American politics,” urging his two bosses in the Oval Office to avoid touching the topic.

While Emanuel worked in Washington, another of his one-time bosses back in Chicago — then-Mayor Richard M. Daley — treated increasing property taxes like the third rail of Chicago politics. Daley did not increase property taxes in 17 of his 22 years as mayor.

At the same time, he made a variety of other choices that led Chicago to this point, from reckless borrowing to signing generous long-term labor contracts that remain in effect.

Daley got away with it for years because he had the money to make everyone happy, thanks in great measure to soaring revenues from the tax on real estate deals in the years when the market was red-hot.

Even before the Great Recession hit, there were clear signs the good times of new libraries, record tree planting and quick graffiti removal would end soon. Rising city expenses were far outstripping revenues, and Daley drew on reserves as early as 2006.

Emanuel knew what he was getting into when he succeeded the retiring Daley in 2011. He’s had a long time by now to try to respond effectively.

What cutting he did already extracted a steep political price for Emanuel. Even if he had put on that floppy sweater long before this spring’s runoff election campaign, the dearth of cash to spread around probably hurt his popularity much more than his occasionally haughty, know-it-all demeanor.

Having survived the runoff, and with the next election years away, there’s no better time for him to make the push for a big property-tax hike than now.

Many in the city, particularly the working poor and the shrinking middle class, would struggle to pay higher taxes. Everyone can legitimately gripe that they are paying more for less already.

And yet there are plenty of homeowners in and near downtown, along the lake and in the gentrifying neighborhoods along Milwaukee Avenue who cannot say they won’t be able to afford to come up with more than they are now paying.

They paid big money for houses and townhouses and condos, and they’ve enjoyed city life and the proximity to the Loop and the lake, all for smaller property tax bills than they would have received for comparably valued homes in virtually any suburb.

Yes, residential property tax rates in the city grew 30 percent between 2003 and 2013, according to the Civic Federation. Still, the nonpartisan watchdog group added that other communities in Cook County “have experienced residential property tax increases of at least 55 percent over the 10-year period.”

The rate increases in the city barely outpaced the 27 percent rate of inflation over that time frame.

Others who have done well by investing in Chicago also would have to pay more to continue to enjoy the city’s offerings.

I questioned Emanuel last year for allowing Uber and other ride-sharing services to enter the market without having to abide by the same rules as their competitors, the cab companies. Among investors in Uber is the talent agency of the mayor’s brother Ari Emanuel.

The mayor now would take a bit of what he gave Uber. In tandem with the property tax hike, Emanuel is proposing a $1-a-ride surcharge on Uber and other similar enterprises.

There still could be hope for Chicago to avoid the day of property tax reckoning once again. Maybe this proposal will be scaled down. Maybe Springfield will grant Emanuel’s wishes for a new city casino.

But somehow, eventually, City Hall’s budget numbers will have to add up.

The big property tax hike seems inevitable.

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