Mayor Lori Lightfoot has changed her tune on linking Chicago property tax hikes to the rate of inflation.
Ahead of submitting her 2023 budget plan next week, Lightfoot announced she wouldn’t include the controversial $42.7 million tax hike tied to inflation, the Chicago Tribune reported. The decision comes two years after Lightfoot introduced the policy to tie property taxes to inflation, in a bid to keep the taxes more stable.
It eases the budget’s path to approval and removes an easy target that opponents in her reelection campaign could have attacked heading into the spring mayoral contest.
“Because our economy continues to show better than projected recovery, our city revenues continue to exceed our estimates,” Lightfoot said. “As a consequence, I am happy to announce that we are able to forgo, for one year, the (consumer price index) increase on the property tax levy.”
The rate of inflation had hovered around 3 percent for the better part of the past 20 years. The problem arose when the city’s inflation rate increased to 7 percent amid the pandemic, which would led to a 5 percent tax increase.
As Lightfoot weighed the decision to drop the tax hike, she likely was comforted by the more than $130 million in unexpected tax revenue now projected to flow into city coffers this year.
The potential tax increase was not received well by many of the city’s aldermen. As they pursue their own reelections and with others retiring after their terms, some offered the mayor pushback.
“As opponents like me pointed out when this was debated, even the Mayor’s five percent cap ‘guardrail’ would still result in a massive property tax increase at a time residents and small businesses are struggling to pay their bills,” Alderman Brendan Reilly previously said in a statement. “Contrary to the Administration’s earlier assertions, it turns out CPI is, in fact, anything but predictable these days.”
Lightfoot’s 2023 budget goes before the City Council Budget Committee for approval on Monday.
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— Victoria Pruitt