In order to shrink the $838 million budget gap Chicago faces next year, Mayor Lightfoot says she wants to avoid raising property taxes but is committed to taxing pricey home sales at a higher rate.
During her address on Thursday night, the mayor said her administration would be planning a graduated real estate transfer tax.
“This will bring relief to homeowners whose houses sell for under $500,000, while owners with higher-valued homes will pay more of their fair share. We are committed to addressing homelessness and housing instability, and putting real resources toward these problems.” Lightfoot said.
Last year, an op-ed by Marisa Novara and Daniel Kay Hertz in the Chicago Sun-Timesargued for then-Mayor Rahm Emanuel to adopt a graduated real estate transfer tax. Emanuel wasn’t interested, claiming that the tax treated homeowners like an ATM. However, now Novara and Hertz hold key positions in Lightfoot’s administration as the Housing Commissioner and the Housing Department’s policy director.
A large portion of the mayor’s speech called on Springfield to help with the pension obligations, which Governor J.B. Pritzker has already said is not an option. Other cities and towns across Illinois have turned to raising property taxes to deal with rising pension costs. The state already has the second-highest property taxes in the nation, and in Chicago many North Side residents are shocked after recent property reassessments.
Regardless of what happens with this budget, Lightfoot said “Chicago will be on the hook for over half-a-billion in new pension obligations over the next three years.”
Lightfoot didn’t want to follow the “old playbook,” and institute another historic property tax increase. At the moment, it appears she’s trying to “avoid that measure,” however the mayor did make it clear nothing was off the table.
The mayor also reassured working-class families living in neighborhoods where “generational poverty has people in its crushing grip” that she would work on bringing a thriving economy to low-income areas.
“Our pathway to fiscal health has to run through households and neighborhoods like Roseland, and Rogers Park, Austin, and Englewood, from the southeast and southwest, and neighborhoods like Pullman and Park Manor,” Lightfoot said.
MarySue Barrett, President of the Metropolitan Planning Council, was pleased to hear similar themes from the campaign trail continue on in office.
“With clear guideposts—lessening the burden on those on the economic margins and retaining businesses—her first state of the city speech struck a common sense tone of minimizing harm. But more importantly, Chicago’s mayor pledged to be bold, transparent and equitable in closing the projected $838 million gap, declaring that fighting poverty is a ‘moral and fiscal imperative,’” Barrett said.
Moving forward, Lightfoot will continue to focus on building more affordable housing and making it accessible to the people who need it. With Novara and Maurice Cox coming to lead the city’s planning and development, Chicago is likely in a good place to provide more affordable housing resources.