Chicagoans face another big property-tax hit in new school deal

Tapped-out Chicago property owners would face yet another tax hit for teacher pensions — but their aldermen would escape another difficult vote — under a historic new statewide school funding deal now headed to Gov. Bruce Rauner’s desk.

That “compromise” bill — approved by Illinois lawmakers this week — authorizes the Chicago Board of Education, comprised of mayoral appointees, to impose a property-tax hike worth $125 million without any involvement whatsoever from the Chicago City Council, whose members are elected.

The Board of Education does indeed plan to approve the increase, enabling the Chicago Public Schools to walk away with a total of $450 million in new state and local money for the 2017-18 school year once Rauner puts his signature on the bill, school officials said.

Rauner plans a bill-signing ceremony on Thursday, his office said.

It’s unclear when the city’s school board will take up the property-tax increase.

This hike would amount to a 2.5 percent increase in the tax bill for an average Chicago homeowner. The owner of a home worth $200,000 would pay an additional $83 in property taxes, records show.

The increase marks the latest in a slew of new taxes and fees Chicago residents have had to swallow over the past three years to shore up dire financial conditions in the city, its schools system and Cook County caused largely by government officials skipping payments into pension funds.

On Tuesday, the Illinois Senate followed the House in authorizing theChicago tax increase as part of a “compromise” school funding bill aimed at reforming how the state funds public education.

The 38-13 Senate vote caps months of negotiations, finger-pointing and uncertainty for school districts across Illinois, many of which, after missing two general state aid payments, have borrowed or cut to pay for classes already underway.

Schools could see their money within days of the bill becoming law, according to the state comptroller.

The inclusion of a tax-credit program for private schools ate up most of the debate on the 550-page bill aimed at prioritizing new education money for Illinois’ poorest and neediest districts.

Illinois contributes the least money of all 50 states to educate its poor students and also boasts the largest gap between poor and rich districts.

That inequity should draw to a close, Senate President John Cullerton said.

“The big accomplishment is that we are ending the worst in the nation
funding formula going forward,” he said after the vote, which lacked the drama of Monday’s House vote.

This year, Chicago will get an extra $76 million under the revamped formula. Illinois also will pay CPS $31 million for grants, including for early childhood education, and $221 million toward CPS’ normal pension costs.

“There’s much attention about Chicago Public Schools, what should not be lost in this debate . . . is what this bill does for small rural school districts in downstate Illinois,” bill sponsor State Sen. Andy Manar (D-Bunker Hill) said after years of trying to fix the formula. “The most profound legislation to ever hit a governor’s desk for Downstate education is this bill, without question.”

Despite their victory in their state capitol, Chicago’s schools still face a budget gap that Mayor Rahm Emanuel has promised to fill locally. Again Tuesday, he refused to say how. CPS’ recently approved budget relied on $269 million in city money, though the latest tax hike could reduce that deficit.

The Chicago Sun-Times has reported for months that the mayor is considering raising taxes on downtown businesses, high net-worth individuals or both to preserve his vaunted longer school day and school year.

Though Chicago homeowners are still reeling from the $588 million property tax increase he pushed through the City Council for police, fire and teacher pensions, the mayor made no apologies for piling on.

“I’ve never, ever said that we were not going to also come up with the resources to make sure our schools were well funded, and we were investing in them,” Emanuel said. “And we never wanted to be in a situation where it was a choice between continuing to invest in our children’s future or paying our teachers’ pensions.”

Even if the controversial property tax vote is passed by the school board, aldermen will wear the jacket for it, said Ald. Pat O’Connor said.

That’s why he’s calling the 45 percent increase authorized by the Illinois General Assembly a “fail-safe” and a “last-case scenario” and pleading with Emanuel and his appointees to choose another route.

“If they can avoid it, it should be avoided at all costs. We’ve just had enough. Not just property owners, it’s renters. It’s people who pay taxes through the pass-ons that exist,” O’Connor said. He noted that aldermen have walked the tax plan repeatedly to solve the city’s $30 billion pension crisis, plus residents have weathered garbage fees, bag taxes and a new penny-per-ounce tax the county imposed on sugary drinks.

“It’s pushing people out of the city. When is enough enough when you
keep going to the same well?” said Northwest Side Ald. Anthony
Napolitano (41st).

“Our homes are extremely high-priced. These people are not white-collar people. They just got lucky and bought into a neighborhood that bloomed. They bought in when houses were a lot lower. Now, we’re looking at $700,000, $800,000 or $1 million homes in some cases. These are city workers, electricians or plumbers.”

Public Safety Committee Chairman Ariel Reboyras (30th) added, “Property owners have had enough. I’ve had enough. . . . No matter who votes to do it, no matter where it happens, they’re gonna blame the aldermen.”

Contributing: Sam Charles

OTHER TAX AND FEE INCREASES FOR CHICAGOANS SINCE 2014

• $838 MILLION in property tax increases, including a $588 million hike
passed by the City Council in 2015 to fund police pensions, fire
pensions, and school construction; and a $250 million hike passed by
the Illinois General Assembly in 2016 to fund teacher pensions.

• 56 PERCENT telephone tax increase passed by the City Council in 2014
to fund laborers’ pensions. A proposed additional increase of 28
percent to revamp the city’s 911 emergency system — a hike that would
bring the current $3.90-per-month fee up to $5 for every cellphone and
landline — has not yet been approved.

• 29.5 PERCENT water and sewer tax passed by the City Council in 2016,
and phased in over four years, to fund municipal employees’ pensions.
The average Chicago homeowner will pay about $225 more on their water
and sewer bills by 2020, as compared to 2016.

• PENNY-PER-OUNCE sweetened beverage tax passed by the Cook County Board
of Commissioners in 2016 to close a $174.3 million budget shortfall.

• $9.50-PER-MONTH garbage collection fee passed by the City Council in
2016 to supplement Department of Streets and Sanitation funding.

• 7-CENT plastic bag tax passed by the City Council in 2016 to encourage
people to use reusable bags.

• 20-CENT-PER-TRIP ride-hailing fee increase passed by the City Council
in 2015 on Uber and Lyft services, hiking the surcharge from $0.30 to
$0.50 per ride, with increases during surge-pricing periods. The city
also passed a 15 percent increase on taxi fares with a 50-cent fee for
paying with credit cards.

Contributing: Mitchell Armentrout

Previously from Chicago