CITY HALL — The Emanuel administration worked to explain and defend a 37.7 percent increase in Chicago's levy for property taxes this year during state-mandated "truth in taxation" hearings Monday.
Ald. Edward Burke (14th), chairman of the Finance Committee holding the hearings, said the city's 2015 property-tax levy would rise from $861 million to almost $1.2 billion, a 37.7 percent increase. According to projections offered by Burke, the city's overall property-tax levy would rise another 9.2 percent in 2016, 4.1 percent in 2017 and 4.7 percent in 2018 to a total of $1.4 billion.
Budget Director Alexandra Holt said the $544 million hike over four years was entirely due to police and fire pension payments required by the state.
"We are obligated to make those payments," Holt said.
"State law," Burke said, "leaves the city with no choice." He referred to a 2010 state law cutting off revenue to the city if it fails to meet its pension obligations as a "sword of Damocles."
Holt acknowledged this year's increase was "a big step up," but estimated that average homeowner tax bills would rise 12.2 percent if the state doubles the homeowner exemption from $7,000 to $14,000 on assessed value. That, she said, would be reflected in second-installment tax bills due next August, and homes valued at $250,000 or less would most likely see no increase.
Yet Ald. Scott Waguespack (32nd) said residents in his North Side ward worried that the expanded exemption might not be signed into law by Gov. Bruce Rauner, as it remains in the midst of a state budget impasse in the General Assembly.
Holt said "historically" there has been little resistance to an expanded homeowner exemption in the state Legislature, but acknowledged that an alternative program to provide rebates to homeowners was still "on the table."
Ald. Carlos Ramirez-Rosa (35th) said Monday that he'd be pushing for his rebate proposal, backed by 20 of his City Council colleagues, as the 2016 budget process continues.
"It's clear today that we're not gonna get the relief we need from Springfield," he said.
Burke further warned that the city budget counts on $200 million in relief in immediate pension payments due in a bill likewise in the General Assembly — that also might not be signed by the governor.
Chief Financial Officer Carole Brown testified that she was "optimistic" Rauner would sign it into law once passed.
Holt repeated for each tax year that the increase would be "fully dedicated" to required pension payments for police officers and firefighters: $318 million this year, $109 million next year, $53 million in 2017 and $63 million in 2018.
Aldermen raised issues, but there was very little public comment during the hearings, which are required by the state for tax increases of a certain magnitude — and the proposed city increase certainly qualified.
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