Wicker Park, Chicago, 60622
July 13, 2016
Chicago mayor Rahm Emanuel defended his position five days after recent $250 million property tax hike agreement. The tax hike supposedly will save the Municipal Employees Pension Fund, which covers police and fire pensions and wrecked Chicago Public Schools. “I understand it’s not popular,” Emanuel told the Chicago Sun Times. “When I ran for office, one of the major issues was removing the doubt over our economic future [caused by] unfunded pensions. All four of ‘em were unfunded.”
Last week, Emanuel made a legislative compromise to resuscitate nearly bankrupt Chicago Public Schools. The amount of tax increase was expected to be $170 million as Emanuel spoke last fall; however, the amount rose to $250 million on top of the last property tax increase of $588 million that occurred less than a year ago.
As a mayor, Emanuel has continuously proposed to rely on tax increases to alleviate Chicago pensions. He took a political risk in proposing an additional $250 million after a record-breaking $589 million last year.
Emanuel, with his phenomenal third property tax increase, aims to save primarily the largest of four city employee pension funds, which does not need City Council approval. He previously promised to double the homeowners’ exemption so there would be no harm to homes worth less than $250,000, but it only ended as a draft in Springfield.
Chicago homeowners whose property taxes have been more affordable than those of suburb homeowners, will find themselves under total of $838 million tax burden over the next few years. For example, residents of Wicker Park, one of the highest property tax-paying Chicago neighborhoods, can count on a hard blow to their bank accounts when tax forms hit their mailboxes. With median housing value of $445,200 compared to $225,700 from the city, it is guaranteed for Wicker Park homeowners to be displeased with Emanuel’s proposal. Comes the question: Is property tax increase the only way to fund those pensions?
Ald. Scott Waguespack (32nd) understands that taxpayers are going to be upset, and he suggests that there are alternatives in lifting the burden. As proposed by the Waguespack-led Progressive Caucus, Emanuel is now looking into taxing big box stores and other business giants utilizing the sewer system. The fall of CPS is the foremost reason for unexpectedly risen level of Emanuel’s agreement. Waguespack told the Chicago Sun Times, “We have to try to shift away from the complete reliance on the property tax.”