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Ald. Smith Proposes Property Tax Rebate To Protect Longtime Homeowners

By Mina Bloom | September 30, 2015 6:34am
 Alderman Michele Smith speaks with supporters at her Election Night party.
Alderman Michele Smith speaks with supporters at her Election Night party.
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DNAinfo/Paul Biasco

LINCOLN PARK — Ald. Michele Smith (43rd) is the latest alderman to propose a rebate to help lessen the blow of a property tax hike. 

In response to an "outpouring of constituent calls," Smith is proposing a rebate she said she believes would protect longtime homeowners, whom she considers "the very people who built up the neighborhood." 

"Many of you who wrote me are close to, or already retired, and living on fixed incomes and want to stay in your home without being forced out. After decades of service to their communities, the very people who built up the neighborhood feel they may be forced to sell their homes and leave," Smith said in an email to constituents.

Under her proposal, homeowners could get a rebate if they have an annual income of less than $100,000, or are older than 60 and have lived in their homes for more than 18 years.

If either of the above criteria is met, the homeowner would qualify for a rebate, or pay lower property taxes.

Smith said the rebate would be calculated the same as in 1st Ward Ald. Joe Moreno's proposal, which would create a "rebate rate" by subtracting household income from $100,000, then multiplying it by the difference in tax rates from year to year and assessed value.

But under Smith's proposal, if the new assessed value is more than 30 percent and greater than the previous year's assessment, a rebate would be offered, she said.

Ald. Carlos Ramirez-Rosa (35th) also recently proposed a rebate in which a median income worker with a home valued at $250,000 would see a rebate of $400.

Smith's office did not provide an exact rebate amount. 

"We're still in the process of crunching the numbers and have enlisted the help of the city's Office of Budget and Management, as well as that of the city treasurer's office to get a sense as to savings as discussions move forward in City Council," she said.

Former alderman and University of Illinois-Chicago professor Dick Simpson said Smith's proposal, while "worth considering," would mean higher property tax bills for other taxpayers. 

"On the surface it's very attractive for many neighbors, but it doesn't fund itself. Someone is going to pay. Will the other property owners be happy seeing an even higher property tax because some seniors are not paying the entire property tax increase?"

"There are a lot of properties that would pay more for this group to pay less," Simpson said.

Mayor Rahm Emanuel wants to expand the homeowner exemption for owner-occupied homes valued at $250,000 or less, so that they "would see either no increase in their bill or will see a decline in their tax bill," according to mayoral spokeswoman Lauren Huffman.

There are many Chicagoans who own or rent properties — commercial and residential — that are worth more than $250,000 or make more than $100,000, and if both Emanuel and Smith's proposals are approved, those owners would end up paying hundreds of dollars more, Simpson said. 

Simpson said he expects other aldermen to support Smith's proposal. But passing it would depend on whether it works for a majority of folks in other wards — not just the 43rd.

In response to Simpson's remarks, Smith said in a written statement: "I respect professor Simpson and think is a common-sense approach."

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