The predictions were right, without real estate transfer tax, property taxes have to increase. And according to the latest projections, the property tax levy will have to go up by about $65 million.
Mayor Lori Lightfoot’s original plan for a graduated real estate transfer tax is no more, according to aldermen. They confirmed the news yesterday along with an increased property tax levy of $65 million, the Chicago Sun-Times reported.
The raise in property taxes comes as no surprise. Despite Lightfoot’s optimism for her original tax plan to generate $50 million in 2020, aldermen have been vocal about the unlikelihood of her plan being pushed into action.
Of the $65 million raise, $15 million is from capturing the growth of new construction and $32 million is associated with “debt service” approved by City Council last spring, according to the Sun-Times.
Lightfoot expected her plan would pass in time to begin collection on Jan. 1. Instead, she was faced with 13 Democratic lawmakers threatening to withhold votes until “at least 60%” of the annual funding is put toward combating Chicago’s homelessness problem, reported the Sun-Times.
During a Tuesday meeting with the municipal council, aldermen were given multiple other options to try to put a plug in the $838 million budget gap but it resulted in even more skepticism from the aldermen.
Lightfoot’s chief of staff shot down the idea to tax hotel rooms at 75 cents-to-$1 per room, which was hatched by Carlos Ramirez Rosa (35th) and Ald. Leslie Hairston (5th). “When it comes to hotel taxes, we’re already one of the highest hotel taxes in the entire country,” chief of staff Maurice Classen said. “To increase that even higher would begin to hurt the industry and actually decrease revenue.”
[Chicago Sun-Times] — Jacqueline Flynn