Thursday, September 03, 2015

Pensions: Rahm to propose biggest Chicago property tax hike in modern history

Grant Park, Chicago
When Richard M. Daley, a Democrat, was mayor of Chicago he and the Illinois General Assembly kicked the pension can down the road. Now the bill is coming due--and rank-and-file city residents will have to pay it and it will hurt.

From the Chicago Tribune:
Mayor Rahm Emanuel is set to call for the largest property tax increase in modern Chicago history to raise enough money to make a major pension payment for police and firefighters next year, the mayor's City Council floor leader and a City Hall source told the Chicago Tribune late Wednesday.

The mayor also plans to push a new garbage collection tax, a new per-ride fee on taxis and ride-hailing services such as Uber and a new tax on electronic cigarettes and smokeless tobacco products.
Pension payments this year total about $478 million. Next year, payments to police and fire pension funds will increase by $538 million [emphasis mine] under current state law, although Emanuel is hoping Gov. Bruce Rauner signs a bill that would allow the city to phase in the higher payments more gradually. Lawmakers approved that bill at the end of May, but have yet to send it to Rauner amid a broader stalemate at the Capitol.
The property tax increase Emanuel is mulling would far exceed what the mayor himself said during the campaign was the largest property tax increase in Chicago history. In 1987, under Mayor Harold Washington, property taxes rose by $79.9 million, which would be $167.8 million in today's dollars after adjusting for inflation. In 2008, under Daley, property taxes rose by $86.5 million, or $96 million in today's dollars.
Daley was elected mayor in 1989--he served five-and-a-half terms The 1990s were a boom time for Chicago--for the first time in decades the city's population increased--although I left in 1999, which was a smart move. But Chicago shortchanged its future obligations to pay for what was then the present.

Today's present is terrible for Chicagoans. And the future looks even worse.

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