Entries associated with the tag "Property Taxes":

In the last few days Mayor Daley has been spreading the word that even though the city faces mountains of debt, there's absolutely no way he will raise property taxes.

Last week he and schools CEO Arne Duncan announced that the Board of Education would rather take $50 million out of reserves than hike taxes for the cash-starved system.

And today he proclaimed that he would mandate furlough days for nonunion city employees to help close a budget deficit he says stands at "a couple of hundred million dollars." But no new property taxes.

This is a surprising turn of events for the mayor, who hasn't been reluctant to hike taxes in the past. For instance, to help close last year's $293 million deficit, Mayor Daley raised roughly $276 million in fees, fines, and taxes, including $83.4 million in property taxes. And this was on top of his $113 million increase in what I call the TIF tax (which the mayor doesn't acknowledge because he's apparently convinced himself that TIFs aren't taxes even though we have to pay them).

So what gives this year?

Well, there are two theories bouncing around City Hall. The nice guy theory is that Mayor Daley truly cares about the little people of his town and he realizes that in these hard economic times they can't afford another tax hike.

"Chicago taxpayers have been generous and supported our school improvements, and they deserve a break," the mayor told reporters at a July 23 press conference where he announced no new property taxes for the schools.

Arne Duncan was even more direct. "People are hurting," he said at the same press conference. "They're having a hard time making ends meet. And we refuse to add to that burden....We will not raise taxes. It would have been the wrong thing to do at this time."

Then there's the more, shall we say, realistic point of view that goes like this. With just six months left before the city submits its official bid for the 2016 Olympics to the International Olympic Committee, the last thing Mayor Daley wants or needs is to risk igniting anything remotely resembling a property tax revolt. Not when he's trying to show the world that everyone in Chicago just can't wait to host the games. There will of course be plenty of chances to jack up taxes next year, when he won't have to impress the IOC.

So which theory do you buy: Mayor Daley truly cares about you, or he wants you to remain asleep? 

Yesterday Mayor Daley held a press conference to announce that help was on the way for the city's poor beleaguered residential property tax payers.

He was going to have the Cook County Board of Review extend the deadline for filing tax assessment appeals. You now have until March 31 to appeal.

Pardon me for being unappreciative, but: thanks for nothing, Mr. Mayor.

I know these things get complicated, so I'll be brief. The most important element in determining how much we pay in property taxes is the levy -- that is, the amount of property tax dollars Mayor Daley wants to spend. Our levy keeps rising because Daley keeps spending more and more money every year thanks to TIFs, the mayor's favorite tax boondoggle.

The mayor either doesn't realize this or doesn't want to admit it. So when the public cries for tax relief, he proposes to tinker with the assessment -- the one part of the taxpaying process he should have nothing to do with. As faithful readers ought to know by now, your property tax bill is basically determined by multiplying the amount your property is valued at (i.e., its assessment)  by the tax rate. If the board of review lowers your assessment, will you pay less in taxes? Absolutely. But the overall amount of property taxes that Mayor Daley's government -- and, let's face it, he controls all aspects of local government -- will remain the same. So the burden of payment will shift from those who know how to play the tax-appeals game to those who don't.

Who generally applies for assessment cuts? Commercial property owners who have the savvy to hire sharp, clout-heavy lawyers who know enough to contribute campaign dollars to the three members of the board of review.

So the mayor's great reform proposal means that the sharpies will get a break and everyone else -- the usual collection of suckers and saps -- will pick up the slack. In the name of cutting our taxes, the mayor will be raising them. And all so he can win some headlines in his ongoing PR campaign to convince the public that he truly cares about taxing them out of their homes.

Please, Mr. Mayor -- no more property tax relief. The taxpayers can't afford it. 

He's at it again.

In this week's Works, I wrote about a recent press conference where Mayor Daley denounced  the county assessor's office and called for widespread "corrections" to property tax assessments.

Now, in today's Tribune, there's an op-ed by the mayor that tells a few more whoppers about his role in our property tax system.

For starters, he claims that he "proposed the original plan that became the 7 percent cap on the taxable value of homes." Not only did Daley not propose the original plan (Cook County assessor Jim Houlihan did), he did very little of the lobbying needed for the watered-down version that passed.

But the big daddy of tall tales in his editorial is this one: "Even with the increase in Chicago property taxes in this year's budget, city property taxes have risen a average of only 1.5 percent a year since I've been mayor."

The only reason Daley can make this claim is because he's not counting hikes in school taxes and, more to the point, he doesn't regard TIFs as property taxes that residents have to pay. Instead, the mayor's official policy is that TIFs dollars are created by some sort of magical City Hall money-making machine at no expense to taxpayers.

But as Cook County clerk David Orr's TIF report makes clear, that's just not so. In 2004 Chicagoans paid $328 million in property taxes to the TIFs; in '05 the TIF property tax take went up to $386 million, and in '06 it rose to $500 million. I suspect the TIF tax surpassed $600 million in 2007, but we won't know for sure until Orr's office completes the official tally in the summer.

Once you factor in the TIFs you get a more realistic idea of why your property tax bill is rising. In 2005, taxpayers paid about $719 million in taxes to the city and another $386 million to the TIFs for a total of about $1.105 billion. In 2006, they paid about $736 to the city and $500 million to the TIFs, for a total of $1.236 billion. That's an $131 million increase, or 12 percent.

In time the amount of property taxes Mayor Daley collects through TIFs -- while claiming you're not really paying into them -- will exceed the amount he officially acknowledges you are paying. We'll be paying twice as much in property taxes as the city acknowledges we are.

It's one thing for Mayor Daley to dwell in a dream world where property taxes aren't really property taxes. But the rest of us still have to pay the bill. 

A few minutes before Wednesday’s City Council meeting, Norman Greenbaum’s "Spirit in the Sky" suddenly began to play over the PA system in council chambers.

It was a fitting prelude to the day’s political highlight: the introduction and quick ascent to the spirit in the sky of an alternative to Mayor Daley’s proposed property tax hike.

Whatever your tastes in music, you’re going to be paying more for the privilege of living in or around Daley’s Chicago next year. Aldermen can no longer even muster the energy to pretend they’re looking for budget cuts, and the plan of would-be independents to levy a new tax on downtown businesses instead of struggling home owners looks to be dead just hours after its birth.

Daley loyalists like 31st Ward alderman Ray Suarez have spent the last few weeks grousing about the property tax hike, but they know it’s inevitable, and many are now caving because they don’t know what else to do. "I’m going to have to go back to my residents and explain it to them," Suarez said Wednesday.

The only purpose of this week’s meeting was to allow Daley allies to defer and publish his 2008 budget. The defer-and-publish maneuver is what it sounds like: an alderman moves to put off a vote on an item before the council until its next full meeting. Usually it’s done when aldermen want to force amendments or gather more opposition to the item. When it comes to the budget, though, it’s invoked to ensure that would-be reformers don’t meddle with the majority’s plans to push the budget through a week later.

Daley’s latest budget plan—including a mere $83 million increase in property taxes, down about $25 million from his original proposal—appears to have enough support to pass next week. Supporters are saying he has the 26 votes he needs, which means that anyone who ends up voting against the budget is either a would-be reformer or a Daley ally who’s been granted permission to "stand up" for the regular people on this one issue.

The mayor is no longer openly discussing alternatives or compromise. Asked today if he was content with a narrow victory, he noted that once, in the days before he grew accustomed to 50-0 council votes, he actually had to fight to win his first race for state’s attorney. "I won by 15,000 votes," he said. "No one ever talks about that."

For weeks independent-minded aldermen have been working to scrutinize the budget, lobby for cuts, demand greater resources for the inspector general, float some small-scale revenue ideas, and generally capitalize on Daley’s unpopular tax proposals. Yet they hadn’t really stepped forward in a clear, unified manner to present large-ticket alternatives.

By Wednesday it was too late.

While other aldermen were busy passing a resolution honoring the heroics of a group of Chicago cops, 22nd Ward alderman Ricardo Munoz was trying to collect signatures for a plan to raise $16 million through a “rescue and disaster response assessed cost”—a tax equal to 40 cents per square foot of leased commercial space downtown, ostensibly to cover the costs of emergency police and fire service for high-rises. Before the meeting was over, Munoz had rounded up 22 names, mostly the usual suspects like Toni Preckwinkle, Joe Moore, Ed Smith, and a few council rookies, though Daley allies John Pope (10th) and Mary Ann Smith (48th) also signed on.

"Downtown businesses aren’t going anywhere else," said Ed Smith, discounting criticism that the plan would place an undue burden on them. "And we have a responsibility to do everything in our power to offer relief on those property taxes."

As Munoz and Smith pointed out, though, 22 signatures won’t necessarily translate to 22 votes, let alone the 26 they’d need.

Daley knows this, but just to make sure, he did his best to kill the idea after it was already dead. He used his tried-and-true strategy of showing outrage and offense, then completely mischaracterizing what it was he was outraged about and offended by as a way to clarify just how outrageous and offensive it really might be if you thought about it that way.

The Munoz-Smith plan would levy the new assessment only on commercial businesses in the Loop, River North, and Gold Coast. Yet Daley repeatedly blasted the horrors it would spawn and spread, like a contagion, in residential high-rises "from the 49th Ward to the 7th Ward."

"I’m more concerned about all the high-rises—people live in high-rises,” he said. "Now you’ve got a group of aldermen that says, 'We want to tax you for living in high-rises.' … This thing will spread from here going north and south. Do these aldermen really believe in that, that it’s good for the goose, it’s good for here, it’s good for all their neighborhoods? I think that’s a recipe for disaster."

The PA system should have been playing Curtis Mayfield’s "(Don’t Worry) If There’s a Hell Below, We’re All Going to Go."

Angry demonstrators clogged the common space just outside City Council chambers Wednesday morning, protesting, among other things, the Daley administration's proposed tax increases on beer, wine, and spirits. "What's the most expensive ingredient in beer?" one sign said. "Taxes!" 

Protests or press conferences of some kind happen before nearly every full City Council meeting, but this one attracted some recent converts to civil disobedience, such as aldermen Eugene Schulter and Patrick Levar. Both are reliable Daley votes in the council, but this time both ripped the idea of taxing alcoholic beverages, saying that would only succeed in driving "mom-and-pop stores and taverns" out of the city.

It's obvious that the mayor's 2008 budget plan is going to have to change. Daley has even said so, announcing that he's willing to slash some of the nearly $300 million in proposed new taxes, including more than $100 million in property levies, and at least delay some spending, such as for additional cops and recycling services. The mayor is a skilled enough politician that he can present this as a thoughtful, generous compromise. In fact, he'd hardly  be the first public official to anger everyone with the specter of a gargantuan tax hike, then show apparent benevolence by implementing a slightly smaller one.

On the other hand, the mayor doesn't have a choice this time.

While some aldermen have moaned about the booze taxes, others have blasted the tax on bottled water or the jacked-up fines for parking violations, and just about everyone has run from the massive property tax increase.

Leading the property tax bitch-fest--it doesn't rise to the level of a "revolt" or even "coffee-cup rebellion"--are the northwest- and southwest-side white and Latino guys who are usually the mayor's closest allies. "The property tax stuff is no good," said 38th Ward alderman Tom Allen, who then asked this reporter for ideas to generate more revenue.

That's the problem right now: just about everybody agrees that the new taxes stink, but they don't know what else to do. Some aldermen have proposed things like scaling back a couple of the TIFs downtown, selling off city-owned plots of land, or fining people who hang signs without a permit, but these ideas don't have widespread support or won't generate enough to replace existing proposals. A few aldermen have groused that budget talks have so far focused on which ways to raise money rather than where fat can be trimmed. 

Most, though, have accepted Daley's argument that any significant cuts will keep Chicago from "moving forward," as his ongoing campaign slogan proclaims. "It's to the point where what used to take a day to get done is going to take a week," said 30th Ward alderman Ariel Reboyras.

But the mayor has to make some choices. He knows his budget doesn't have close to a council majority. Black and "independent" aldermen appear to be more open to many of the tax ideas than the mayor's usual friends, but they're only going to support them if Daley gives them a few gifts in return--such as additional funding for the Inspector General's office or an agreement to settle the police torture lawsuits. 

Daley's not going to make those deals. So instead he's got to appease the aldermen who represent the bungalow belt. "In this environment, there's not a lot the mayor can promise you--or threaten you with, which he never did openly, but it happened," said Brian Doherty, alderman of the conservative 41st Ward on the far northwest side. "The old patronage-type government is gone, there are new aldermen in the council, and people are against this property tax increase. It makes for an interesting time."

Doherty's prediction: "They'll keep lowering the property tax until they get 26 votes."

That's what other mayoral allies, such as council budget committee chair Carrie Austin, are already talking about.

But don't expect many more spending reductions. These aldermen are now hoping manna will drop from the sky. On the off chance that doesn't happen, they're wondering how high they can raise vehicle stickers and other fees, how fast parking meters can be leased to a private company, and what the odds are that the state will deliver Chicago a casino.

Catch Reader columnist Ben Joravsky tonight at 6 PM on WLUW, 88.7 FM, where  Mike Stephen and Andy Hermann's show Outside the Loop Radio will focus on the how and why of rising property taxes that threaten city residents. For more on property taxes and the intricate mechanisms that underlie them, see this archive.

Update: You can also listen online at wluw.org or wluw.streamguys.net/listen.pls. (Thanks to commenter Dunl for the add.) 

The city announced today that it's facing a $217 million budget shortfall and might have to raise taxes in the coming year.

Big surprise.

As you may recall from last year's tutorial on taxes, budgets are projections. Each year Mayor Daley predicts how much money he expects to generate in taxes and fees and how much money he expects to spend. If the latter is greater than the former, he has to raise taxes to make up a deficit. If not, taxes remain flat.

Last year at about this time, Daley was gushing that his managerial expertise had left the city flush and there would be no need to raise taxes. On the campaign trail last fall he announced that the city was facing a $65 million shortfall, the lowest in five years. Now he's saying the economy was worse than expected, with the real estate market sagging--hence the huge deficit.

I don't think the economy's the big difference. The difference is that Daley was running for reelection last year and this year he's not. Think of the increases in taxes and fees as Daley's way of saying thanks for your vote, suckers.

And the city did hit you with tax increases last year--they just didn't tell you about it. I know, I know, in today's article about the looming deficit, the Trib claimed that "taxpayers escaped any increase a year ago."

I don't know why, but the big papers aren't telling you the whole story about your property taxes. Every time the city creates a tax increment financing district it effectively raise your property taxes, as the other taxing bodies raise their tax rates to compensate for the loss of revenue. There are now 153 TIFs in Chicago, diverting over $400 million a year in property taxes. And the city keeps creating new TIFs almost every month. TIFs feed the slush fund the city uses to line the pockets of the mayor's developer friends.

In a month or two the second-installment property tax bill will come out, and scores of home owners on the west and south sides will get clobbered with tax hikes approaching 100 percent. In addition, the soaring taxes will make communities like Washington Park, Woodlawn, Garfield Park, and Lawndale unaffordable for poor or working-class people who might want to live there.

The only mystery is who Daley will blame for the coming tax hike. I predict he'll blame an economic downturn, Cook County assessor Jim Houlihan for the high assessments, and the general assembly for not giving him more money for the schools. I guarantee he won't say a word about the TIFs.

As we head into another round of the never-ending fight over the so-called 7 percent property tax cap, I think it's wise for Chicagoans to brace themselves for a significant rise in taxes when the next installment comes out this summer.

This realization hit me yet again at a press conference put together yesterday by Cook County assessor James Houlihan and several ministers from around the city. Held on the steps of First Baptist Congregational, at Washington and Ashland, it was intended as a show of support for the cap--which in fact is not a cap at all but a home owner's exemption of $20,000. Passed in 2004 to help limit the hit taxpayers were taking as a result of rising reassessments, the "cap" is set to expire this year, in which case the home owner's exemption would plummet back down to $4,500. 

It's not as though Houlihan's press conference was without heavy hitters. There was the Reverend Jesse Jackson, who spoke pretty accurately about our property tax system when he said, "There's always some scheme afoot that rewards the wealthy and punishes the poor." But it wasn't so much who was there as who wasn't--Mayor Daley--that mattered. Despite the mayor's rhetoric about how he worries John and Jane Bungalow may get taxed out of their longtime family homes, he's never really lifted a finger to push tax relief through the Illinois General Assembly. 

He was supposed to show up at yesterday's press conference, or at least send a representative. But no one from the mayor's office came. Instead Daley hastily put together his own press conference unveiling a new proposal for an independent police oversight board. Set at City Hall at the same time as Houlihan's press conference, it drew most of the mainstream media away and became front-page news. There was next to nothing about Houlihan's press conference.

It's unfortunate that the property tax issue doesn't receive more attention. Sure, it's complicated; sure, there are sexier topics. But it's hardly as though this is a minor issue without relevance to anyone's life. By Houlihan's calculations, taxes on the west and south sides could more than double without the tax cap. I've been studying the impact of coming tax bills on the west side, where land values are soaring because of approaching gentrification. Come August, people can expect to get tax bills of upwards of $5,000, nearly four times what they had to pay last year. If I were cynical, I'd say the rising property taxes were all part of the mayor's plan to force west-side homeowners into foreclosure, so the city can claim their tax-delinquent property and auction it off for cheap to well-connected developers.

In actuality, Daley's probably playing a different game, holding back his support for the 7 percent cap until he sees how much school funding the state will pony up for. Only after that's decided will Daley will know how much of a property tax break he's willing to give the little people. Don't expect much.

Thomas Jaconetty is a man who wears two hats. He's an election-law attorney, routinely called upon by Democratic incumbents to use his mastery of the election code to defend them agianst nominating-petition challenges or knock independents off the ballot. And since 1989 he's also been deputy chief commissioner of the Cook County Board of Review, the three-person body that oversees property tax appeals.

His election-law business remains steady, as evidenced by his presence at the County Building on Monday, December 11, where he accompanied one of his chief clients, 45th Ward alderman Patrick Levar, as he filed his nominating petitions for February's election. But his position at the board took a blow earlier in the month, when he was dumped as deputy chief commissioner. Greg Hinz at Crain's Chicago Business reports that Jaconetty was the victim of a power struggle that had newly elected commissioner Brendhan Houlihan (no relation to Cook County assessor James Houlihan) teaming up with incumbent commissioner Larry Rogers Jr. against commissioner Joseph Berrios to replace Berrios's pal Jaconetty with Rogers's chief of staff, Scott Guetzow.

Apparently Jaconetty landed on his feet. While watching Levar file his petitions, he told me that he was now on Berrios's staff and had no grudges against Rogers, Guetzow, or Houlihan. As long as Berrios is at the board, Jaconetty will be too. Their alliance goes back to the 70s, when they were young precinct captains in alderman Thomas Keane's legendary 31st Ward Democratic organization.

For property tax payers it's a tempest in a teapot. No matter who's in charge, our property tax system remains an unfair, seemingly arbitrary mass of contradictions. The well connected get big breaks; the rest of us suckers don't. Under the new regime, look for the Board of Review to continue doling out small breaks to the little guys smart enough to hire the right lawyers. As the commissioners see it, if they give enough little breaks to enough little people, we'll remember them with fondness come election time.