Rahm proposes massive property tax hike for Chicago

In the beginning of a series of tax hikes that will drive up the cost of living for Chicago residents, Chicago Mayor Rahm Emanuel is proposing half a billion dollars in property tax hikes, along with another hundred million bucks in mandatory garbage collection fees – another tax hike, in effect. Fran Spelman writes in the Chicago Sun-Times:

Mayor Rahm Emanuel is poised to raise property taxes by $500 million for police and fire pensions and school construction and impose a garbage-collection fee to generate $100 million more, City Hall sources said Wednesday.

The $500 million property tax increase will cost the owner of a home valued at $250,000 roughly $500 more each year. The garbage fee — widely viewed as a back-door property-tax hike — will be a monthly assessment of roughly $11 to $12 per household.

I am not sure how many houses are available for $250k in the Windy City. I do know that a decent house costs 2 or 3 times that, and that million dollar properties are not uncommon in the city’s nicer neighborhoods. As they say on the TV pitches, “ But wait! There’s more.”

The mayor’s 2016 budget also will include a tax on e-cigarettes and other smokeless tobacco products — roughly equivalent to the $7.17 tax slapped on a pack of cigarettes purchased in Chicago — and a $1 a ride surcharge on Uber and other ride-hailing services.

Sources said the surcharge will be part of a broader package of reforms to level a playing field that has allowed ride-hailing companies to siphon business from taxicabs.

A penny-an-ounce “fat tax” on sugary soft drinks aimed at curbing obesity might also make its way onto the smorgasbord of tax and fee hikes served up by the mayor, depending on the outcome of a public hearing spearheaded by the tax’s champion: Ald. George Cardenas (12th), chairman of the City Council Committee on Health and Environmental Protection.

The 60 percent increase in the city’s property tax levy, along with a garbage fee, ride-hailing surcharge and smokeless tobacco tax, make up the largest collection of tax and fee hikes Chicagoans have ever seen.

Large as this increase is, it won’t solve Chicago’s pension crisis. The $9.5 billion pension crisis at the Chicago Public Schools is still not addressed.

Emanuel has offered to raise property taxes by an additional $170 million for the schools, but only if teachers accept the equivalent of a 7 percent pay cut and the state reimburses CPS for “normal” pension costs.

That would require the City Council to cast a second vote — this time to reinstate the old, dedicated property tax levy for teacher pensions.

Even if he gets all the taxes instated, Rahm still has a pile of Chicago-style issues ahead.

The suburban-style garbage-collection fee could be a tough sell.

African-American aldermen have urged Emanuel to trash it on grounds that it will leave some neighborhoods filthy, breed widespread avoidance and possibly, cost laborers their jobs. (snip)

With some suburbs using one-man crews, sources said the mayor has approached the Laborers Union about possibly reducing the size of the city’s three-man crews and reassigning those employees to other vital services, like tree-trimming and rodent control.

Chicago’s municipal government is in the process of converting itself into primarily an annuity for retired employees, with a little but of government service thrown in.

Hat tip: Peter von Buol

In the beginning of a series of tax hikes that will drive up the cost of living for Chicago residents, Chicago Mayor Rahm Emanuel is proposing half a billion dollars in property tax hikes, along with another hundred million bucks in mandatory garbage collection fees – another tax hike, in effect. Fran Spelman writes in the Chicago Sun-Times:

Mayor Rahm Emanuel is poised to raise property taxes by $500 million for police and fire pensions and school construction and impose a garbage-collection fee to generate $100 million more, City Hall sources said Wednesday.

The $500 million property tax increase will cost the owner of a home valued at $250,000 roughly $500 more each year. The garbage fee — widely viewed as a back-door property-tax hike — will be a monthly assessment of roughly $11 to $12 per household.

I am not sure how many houses are available for $250k in the Windy City. I do know that a decent house costs 2 or 3 times that, and that million dollar properties are not uncommon in the city’s nicer neighborhoods. As they say on the TV pitches, “ But wait! There’s more.”

The mayor’s 2016 budget also will include a tax on e-cigarettes and other smokeless tobacco products — roughly equivalent to the $7.17 tax slapped on a pack of cigarettes purchased in Chicago — and a $1 a ride surcharge on Uber and other ride-hailing services.

Sources said the surcharge will be part of a broader package of reforms to level a playing field that has allowed ride-hailing companies to siphon business from taxicabs.

A penny-an-ounce “fat tax” on sugary soft drinks aimed at curbing obesity might also make its way onto the smorgasbord of tax and fee hikes served up by the mayor, depending on the outcome of a public hearing spearheaded by the tax’s champion: Ald. George Cardenas (12th), chairman of the City Council Committee on Health and Environmental Protection.

The 60 percent increase in the city’s property tax levy, along with a garbage fee, ride-hailing surcharge and smokeless tobacco tax, make up the largest collection of tax and fee hikes Chicagoans have ever seen.

Large as this increase is, it won’t solve Chicago’s pension crisis. The $9.5 billion pension crisis at the Chicago Public Schools is still not addressed.

Emanuel has offered to raise property taxes by an additional $170 million for the schools, but only if teachers accept the equivalent of a 7 percent pay cut and the state reimburses CPS for “normal” pension costs.

That would require the City Council to cast a second vote — this time to reinstate the old, dedicated property tax levy for teacher pensions.

Even if he gets all the taxes instated, Rahm still has a pile of Chicago-style issues ahead.

The suburban-style garbage-collection fee could be a tough sell.

African-American aldermen have urged Emanuel to trash it on grounds that it will leave some neighborhoods filthy, breed widespread avoidance and possibly, cost laborers their jobs. (snip)

With some suburbs using one-man crews, sources said the mayor has approached the Laborers Union about possibly reducing the size of the city’s three-man crews and reassigning those employees to other vital services, like tree-trimming and rodent control.

Chicago’s municipal government is in the process of converting itself into primarily an annuity for retired employees, with a little but of government service thrown in.

Hat tip: Peter von Buol