No choice but to raise property taxes if Springfield doesn’t help, Lightfoot says

Without a casino gambling fix and a graduated real estate transfer tax, Lightfoot says her options are “severely limited.”

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Mayor Lori Lightfoot acknowledged Friday she will have no choice but to raise property taxes — which were more than doubled by former Mayor Rahm Emanuel — if her agenda falls flat in the General Assembly’s fall veto session.

Lightfoot’s heavy-lift requests for a graduated real estate transfer tax and a casino gambling fix — either through city-state ownership of a Chicago casino or a revised tax structure — face long odds in Springfield amid a blockbuster corruption scandal that has spread from Chicago and the south suburbs to Springfield.

Gov. J.B. Pritzker was “blindsided” by the mayor’s plan and read about it first in the Chicago Sun-Times.  

A legislator who has taken the lead on gambling issues has also argued that re-opening the casino bill for Chicago would “open the floodgates for everybody who has problems with” the legislation causing “unnecessary drama.”

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Against that backdrop Lightfoot was asked whether beleaguered Chicago homeowners should brace themselves for yet another property tax increase.

“It’ll be very difficult to avoid a property tax increase if we do not get help from Springfield. … There are limited tools that a mayor can use to generate substantial revenue. Property tax is really chief among them,” the mayor told the Sun-Times.

“It’s certainly my hope to avoid a large property tax increase. I’ve heard that message loud and clear — whether it’s people coming up to me on the street, our budget town halls, people who filled out the surveys. They don’t want a property tax increase. That has become a real sticking point for people. But if we don’t get those two things, our options are severely limited.”

In 2015, Emanuel persuaded 35 aldermen to approve a $588 million property tax increase for police and fire pensions and school construction. It was the largest property tax increase in Chicago history.

On Friday, the mayor refused to say how big the property tax hike might be.

“We’ve run a lot of different scenarios looking at options. Best case. Worst case. We’ll be prepared,” she said.

“I don’t want to speculate about something that hasn’t happened and something I’m looking to avoid.”

The mayor also disclosed she might propose “some modest increases” in other local taxes in addition to the $40 million congestion fee she is championing over strenuous objections from Uber and Lyft.

“The ride-share companies have had a very good run here in Chicago. And as a consequence, we’ve seen traffic congestion increase 271 percent. They should partner with us,” she said.

On his way out the door, Emanuel proposed a $10 billion pension borrowing plan to ease the pain of post-election tax increases by “as much as $200 million” in his successor’s first budget. But an ordinance setting up the structure for a pension borrowing never got a City Council hearing, let alone a vote.

Lightfoot hinted strongly she plans to resurrect the idea, but a smaller version of it.

“We’re certainly not gonna do a $10 billion [pension obligation bond]. That would not be in the best interest of taxpayers. It’s very risky. But we’re looking at a range of options. … A lot of what we do will depend on Springfield. But we have to have a number of different tools at the ready,” she said.

To save as much as $200 million, Lightfoot said she will permanently eliminate a “substantial number” of the 3,100 vacancies in the city budget.

“We’re gonna close a lot of ’em out. … We can’t afford it,” she said.

Union leaders won’t like it. That means those vacant jobs can never be filled. But the mayor said they “recognize the situation that we’re in. ... Everybody knows there’s gotta be shared sacrifice. This is a very tough budget.”

The shared sacrifice will extend to the previously sacrosanct Chicago Police and Fire Departments, where administrative functions have been merged and special units will be disbanded to return hundreds of officers to districts, the mayor said.

“No district commander should have to beg, borrow and steal to have resources that he or she needs, particularly during the summer months, to get the job done,” she said.

Although she ruled out closing fire stations, Lightfoot made it clear she is looking closely at costly perks in the firefighters contract with an eye toward finding the money to increase the number of ambulances.

“We’re looking at everything. There are no sacred cows,” she said. “We have to have more ambulances. We have to cut down on response times.”

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