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Lightfoot’s $94 Million Property Tax Hike Clears Major Hurdle

The city's Finance Committee approved the tax hike by a 21-12 vote. Mayor Lori Lightfoot needs 26 votes at City Council to pass it.

Mayor Lori Lightfoot answers questions at a press conference on March 20 in Chicago.
Colin Boyle/Block Club Chicago

CHICAGO — Mayor Lori Lightfoot’s 2021 pandemic budget passed its first test Wednesday as the proposed $94 million property tax increase advanced out of committee.

Lightfoot has described the property tax increase as a necessary tool to close an unprecedented $1.2 billion budget gap. But aldermen have pushed back on the plan and offered up alternatives as property owners struggle amid coronavirus, including at a Finance Committee hearing Tuesday.

During a virtual meeting, the Finance Committee advanced the $1.6 billion property tax levy — $93.9 million larger than 2020’s levy — to the full City Council by a 21-12 vote. 

Aldermen voting against the tax hike included Brian Hopkins (2nd), Anthony Beale (9th), Patrick Daley Thompson (11th), Marty Quinn (13th), Ed Burke (14th), Raymond Lopez (15th), Matt O’Shea (19th), Silvana Tabares (23rd), Anthony Napolitano (41st), Brendan Reilly (42nd), Tom Tunney (44th) and Debra Silverstein (50th).

Aldermen voting for it were Pat Dowell (3rd), Leslie Hairston (5th), Roderick Sawyer (6th), Michelle Harris (8th), Susan Sadlowski Garza (10th), George Cardenas (12th), David Moore (17th), Derrick Curtis (18th), Howard Brookins (21st), Michael Scott (24th), Walter Burnett Jr. (27th), Jason Ervin (28th), Chris Taliaferro (29th), Ariel Reboyras (30th), Scott Waguespack (32nd), Carrie Austin (34th), Gilbert Villegas (36th), Emma Mitts (37th), Nick Sposato (38th), Michele Smith (43rd), and Harry Osterman (48th).

Lightfoot thanked the aldermen that “stepped up today” to vote yes and said she’ll continue to work with the Council to secure 26 votes.

“Our residents expect us to lead. They expect us to step up and make the hard decisions, particularly in difficult times like these,” she said. “…I take nothing for granted, and we’re going to continue to work hard.”

The increase accounts for a $34 million increase linked to a rise in the consumer price index, $42.5 million allotted for expected missed payments and $16 million resulting from new properties coming online in 2020.

RELATED: Aldermen Fight Back On Proposed Property Tax Increase As City Tries To Fill $1.2 Billion Budget Hole

The plan also calls for an annual increase in the tax rate of 5 percent or the rise in the consumer price index, whichever is lower, to keep up with escalating pension payments. However, city officials have assured aldermen the increase would still have to be approved by City Council every year.

A separate 21-12 vote on the same roll call advanced an ordinance to increase certain fines and fees, including doling out $35 tickets to those caught zooming past city speed cameras at just 6-10 miles per hour over for the second time.

If the committee vote tally holds, that leaves Lightfoot needing five votes from the 17 aldermen who were absent or not a member of the Finance Committee to pass the property tax hike, one of several votes to be taken by the full City Council to approve Lightfoot’s overall $12.8 billion budget.

Ahead of the vote, Burnett praised the Lightfoot administration and said the property tax hike was necessary to keep the government functioning.

“A lot of us are property owners, some of us more than one property, and God knows we don’t want to pay any more taxes,” he said. “But at the same time, we know that our city still has to function.”

In a last ditch effort to block the property tax increase, Ald. Ed Burke (14th) pushed the administration to eliminate more 2021 job vacancies, increase revenue projections and include funding from a second federal stimulus package that has yet to be passed.

Burke described the budget process as “more art than science,” and said there’s still time to “be a hero” and reject the tax hike.

But Lightfoot’s finance team pushed back on Burke’s suggestions, saying of the approximately 1,000 vacancies, over 600 are in the Police and Fire Departments and are vital city services.

Relying on federal funding, without knowing if or when a stimulus package could be passed or how much Chicago could receive was not prudent, they argued.

The revenue package also includes raising more than $100 million from small increases in fines, fees and other taxes, including:

  • Increasing the city’s lease tax on cloud computing services from 7.25 percent to 9 percent, raising an additional $15 million.
  • Guarding $16 million in rideshare fees within the city budget instead of using the funds to subsidize the CTA, as the city has since 2018.
  • Increasing the city’s vehicle fuel tax from $0.05 to $0.08, raising an additional $10 million for the city.
  • Adding more than 750 parking meters to raise an additional $2.5 million.
  • Tying commercial refuse container fees to annual increases in the cost of living, generating a projected $270,000 in additional revenue next year.
  • Giving the Chicago Department of Water Management authority to administer the city’s Lead Service Line Replacement Program, including by creating a grant program to help “income-qualified homeowners” replace their service lines.
  • Empowering the city comptroller to “waive fees and set payment plans” for people who use public ambulance services.
  • Providing a one-time account credit for utility customers who opt for paperless billing.
  • Raising harbor permit fees and fines for an additional $15,000 in annual revenue.

Lightfoot has amended the budget over time to garner support for the plan, including avoiding laying off 350 city workers by borrowing $15 million against the tax revenue scored from cannabis sales and increasing funding for a co-responder pilot program to pair mental health professionals with police officers when responding to some mental health emergencies.

A third measure to issue a general obligation bond to refinance and restructure the city’s debt, including $501 million in savings for 2021, and contribute $1.4 billion towards Lightfoot’s five-year $3.7 billion capital spending plan also passed 22-10, with O’Shea included in the yes votes and Daley Thompson recusing himself because cousin Bill Daley works for a bank involved in the bond.

Burnett praised the package as a carrot to aldermen “to satisfy us to allow us to be able to bring something back to our community.”

But others were weary the spending plan would miss their wards.

Referencing a Chicago Tribune report that cited Lightfoot telling members of the Council’s Black Caucus, “don’t come to me for shi*t,” if they don’t support her budget, Lopez questioned how the city would prioritize infrastructure projects in the capital spending plan.

“Our Mayor has notoriously said, ‘don’t ask us for crap,'” he said. “That means one-third of this committee has been put on a do-not-ask list.”

Gia Biagi, commissioner of the Department of Transportation, told Lopez the administration is focused on a “needs-based” program, without directly answering if wards represented by unsupportive aldermen would be overlooked in the spending package.

The Budget Committee will meet Thursday to take up the spending portion of Lightfoot’s budget, with the full City Council meeting again Monday — the earliest the budget could be approved.

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