City Council OK's Budget, With Hefty Property Tax Increase

An overwhelming majority of City Council members approved Mayor Rahm Emanuel’s $7.8 billion budget that includes a $588 million property tax hike to be spread over the next four years.

The budget will be funded by $720 million in new taxes, fines and fees. The dire measures are intended to address the city’s underfunded pension system as well as improve the city’s financial footing .

Before City Council members took the vote on Wednesday, one North Side alderman compared the city’s current fiscal decay to a “municipal illness.”

The $543 million incremental property tax will go toward police and fire pensions, the largest in city history.

The biggest chunk -- $318 million -- will be tacked on the to the 2016 tax bills payable in August 2016. Successive increases of $109 million payable in 2017, $53 million payable in 2018, and $63 million will be due in $2019, the Chicago Sun-Times reported.

There is also a separate $45 million property tax increase that will fund school construction.

Chicago residents can expect the city’s first garbage collection fee, with a cost of $114 piled on to the city’s 613,000 owners of single-family homes, two-, three- and four-flats that still get city trash pickup. Senior citizens will receive a 50-percent discount.

City Council members voted 35-14 in favor of the budget. Those opposed included Aldermen Debra Silverstein (50th), Harry Osterman (48th), Brendan Reilly, (42nd), Gilbert Villegas (36th), Carlos Ramirez-Rosa (35th), Christopher Taliaferro (29th), Roberto Maldonado (26th), Brian Hopkins (2nd), Susan Sadlowski Garza (10th), Ervin (28th), Deborah Mell (33rd), Napolitano (41st), Milly Santiago (31st) and Scott Waguespack (32nd).

Ald. David Moore (17th) joined those who voted against the budget in opposing the separate property tax increase.

As unpopular as the property tax increase is, Ald. Matt O’Shea said in an email blast to his 19th ward constituents as “the only revenue source available to fulfill our commitment to the men and women who put their lives on the line for us on a daily basis.”

“For too long, the city has relied on first responders to keep us safe, without adequately funding the retirement benefits they were promised. Today, I can honestly tell you that I cast my vote in favor of this budget because it is the right thing to do. A vote of ‘no’ on this budget is a vote against the fiscal stability of Chicago and a vote against the interests of the nearly 5,000 first responders who reside in Beverly, Morgan Park and Mount Greenwood. Our police officers and firefighters deserve their pension benefits.”

Although hesitant to enact a garbage collection fee, O’Shea said he favored a four-year cap and the creation of a sanitation enterprise fund that would keep the revenue generated from the fees “separate” from other municipal fees to be spent only on expenses related to sanitation collection and disposal.

The mayor is banking on Gov. Bruce Rauner’s support to double the homeowner’s exemption in the city form $7,000 to $14,000, so that homes less than $250,000 would be protected from the hike. The City Council passed the homeowners exemption after the budget vote, the Sun-Times said, but it still needs to be passed in Springfield, where a house committee has already approved it.