Lightfoot under attack for RE tax incr tied to inflation?
Here's a good joke. We own two places (Arl Hts and Steamboat, Co). The Steamboat place is worth over twice the place in Illinois. And our taxes in Steamboat, about 25% of that in Illinois. Hilarious but true.
Alderman calls for repeal of Mayor Lightfoot’s inflation-tied property tax increases
By John Byrne and Alice Yin
Jul 27, 2022 at 2:25 pm
With inflation soaring, a downtown alderman wants to end Mayor Lori Lightfoot’s policy tying Chicago’s annual property tax hike to the increase in consumer prices.
Days after the Tribune reported that Lightfoot’s 2023 property tax increase, linked to the consumer price index, will total $85.5 million if she opts to take it all, Ald. Brendan Reilly, 42nd, introduced an ordinance at a City Council meeting calling for the mayor’s tax formula to be rolled back.
Reilly represents the Loop, the Magnificent Mile, River North and other Chicago areas hardest hit by property taxes thanks to their big commercial properties and expensive residences.
His brief ordinance simply states the inflationary property tax policy passed by Lightfoot as part of her 2021 budget “is hereby repealed in its entirety.”
Reilly was one of 21 aldermen who voted against Lightfoot’s 2021 budget that first included the inflation-tied tax, which automatically raises the city’s tax levy by the rate of inflation or 5%, whichever is lower. He said he always “questioned the volatility of (the consumer price index) and the potential for taxpayer exposure to runaway inflation and wasn’t satisfied with the answers” he got from the Lightfoot administration.
“As opponents like me pointed out when this was debated, even the Mayor’s 5% cap ‘guardrail’ would still result in a massive property tax increase at a time residents and small businesses are struggling to pay their bills,” Reilly said in a statement Wednesday. “Contrary to the Administration’s earlier assertions, it turns out CPI is, in fact, anything but predictable these days.”
Chicago property owners and renters alike could be affected by property tax increases. An aerial view of the Bucktown neighborhood is shown in 2020. (Zbigniew Bzdak / Chicago Tribune)
Just nine other aldermen joined Reilly in sponsoring the proposal, which was sent to the council Finance Committee for further consideration. That makes its chances of getting backing from a majority of the 34-member committee or the 50-member council appear unlikely.
Still, with Lightfoot and aldermen approaching reelection early next year, Reilly’s move could spotlight which of them support ending the annual tax increase, and which of them don’t.
Lightfoot pitched her decision nearly two years ago to tie property taxes to the rate of inflation as a good move for both the city and taxpayers that showed she had political discipline her predecessors lacked.
Inflation for most of the previous two decades had hovered at or below 3%. Enacting those kinds of relatively reasonable annual bumps would move Chicago away from the traditional yo-yoing effect of mayors raising taxes by big amounts immediately after winning an election, only to enact more austere budgets that don’t require such increases when their terms are nearly up, Lightfoot argued.
For this year, the inflationary property tax increase was $22.9 million, based on inflation rising 1.4% between December 2019 and December 2020.
But inflation between December 2020 and December 2021 hit 7%, as the U.S. slid into its worst inflationary crisis in at least two generations. Even with the 5% cap kicking in, that would raise taxes by $85.5 million next year.
Lightfoot is not required to take the full amount. Faced with the difficulty of getting aldermen to vote for an election year budget with a sizable property tax increase, she could decide to ask them for a smaller amount, or no tax hike at all.
That could open her up to criticism from mayoral challengers that she lacks the political backbone she touted in adopting the tax increase policy, but that might be preferable to defending the decision to raise taxes on struggling residents.