Mayor’s Budget Task Force Welds Property Taxes to Inflation

Chicago Mayor Brandon Johnson’s task force formed to combat the city’s budget crisis issued its final report, which outlines pathways to address Chicago’s long-term fiscal challenges.

A previous interim report by the task force claimed that there are up to 39 options for the city to bring in anywhere from $630 million to $1.7 billion in new revenue through tweaked taxes, fines and inflation-linked property tax increases. The mayor’s office argues that Chicago must bring its revenue system into the modern era to confront the looming pension crisis and bring much-needed stability to the city’s revenue streams.

Notably, the report is holding firm on its recommendation to weld property taxes to inflation, and incrementally increase them. While the debate on property taxes will continue, more immediate and long term help is required to solve the city’s $36 billion pension burden, according to the report.

In 2024, Johnson proposed a $300 million property tax increase, but the Chicago City Council unanimously rejected it. Johnson has been hesitant to increase property taxes since, but budget recommendation committees have been increasingly bullish on increases tied to inflation.

Loop Capital’s Jim Reynolds and Karen Freeman-Wilson of the Chicago Urban League, the task force co-chairs, told Crain’s that the current property tax structure is unpredictable for the average person without an automatic adjustment. If property taxes are going to increase, homeowners might as well know when and by how much, as opposed to rolling the dice in the dark.

Chicago City Council would still have to consider and approve the recommendations for any of them to take effect, and state legislators would have to approve some of the changes, as well..

Johnson might be out of office by the time any of the real estate-focused recommendations have any effect on the city’s budget deficit. The incumbent mayor is facing a wide number of challengers in next year’s mayoral race, including from Matthew Brewer, the interim head of the Chicago Housing Authority that has been in a power struggle with Johnson in recent months, and Johnson has not indicated if he will run for re-election.

— Hunter Cooke