Property Taxes Expected to Increase in Chicago to Mitigate City’s Impressive Debt
According to Chicago’s 2015 Comprehensive Annual Financial Report, our city’s debt has more than tripled since 2014 and now has unfunded liabilities totaling nearly $24 billion. Without significant pension reforms and spending reductions Chicago’s debt will undoubtedly continue to grow. While city and state officials are pursuing a variety of policies aimed at mitigating Chicago’s financial woes, the city’s willingness to increase property taxes is causing Chicagoan property owners to grumble.
In October 2015 Chicago passed a $700 million property tax increase in order to help fund the city’s police and firefighter pensions, reports the Illinois Policy. The Illinois Policy also notes that the city plans to raise property taxes by an additional $250 million in order to help fund the Chicago Public Schools pension system. In fact, this impending tax increase has already been approved by the Illinois General Assembly as part of the state’s stopgap budget. Therefore, it seems inevitable that property taxes in Chicago will be raised by 0.383 percent across the board, which means that property tax bills for Chicagoans will be on average 13 percent higher than last year. Unfortunately, Chicago’s financial situation is so bleak that these massive tax hikes will likely not be the last that we see.
How Will Illinois’ Tax Increases Impact Individuals?
Sometimes it is easier to grasp the magnitude of a tax increase by looking at how the new tax may impact individuals living in Chicago. While individual bills will vary widely depending on where the homeowner’s property is located, an article from the Chicago Tribune provides the following helpful statistics:
- A homeowner with a property valued at $225,000 can expect to receive a property tax bill of $3,633 (which represents a $413 increase), and
- Some homeowners will see their property taxes increase by more than $5,000.
Are Property Tax Rebates on the Horizon?
In the wake of Chicago’s latest property tax increase announcement, Chicago’s mayor is facing some major political fallout. However, in response to criticism about the unpopular tax hike the mayor has stood by the increase noting that the benefits of implementing an unpopular tax outweighs the fiscal irresponsibility of leaving Chicago’s pensions unfunded, reports the Chicago Sun Times. In order to mitigate some of the fallout, the mayor has announced that there will be a property tax rebate for seniors and others groups to ensure that the increased tax burden does not fall squarely on them. However, the Chicago Sun Times notes that the mayor’s administration is scrambling to find the tens of millions of dollars that would be needed to bankroll these promised rebates. The paper also reports that the mayor’s original promise to hold homeowners with homes worth less than $250,000 harmless has not been well received in Springfield.
Need Legal Advice?
While the City of Chicago is trying to mitigate its debt by taxing property owners, many individuals in Chicago are also in need of debt relief. If you live in the Chicago metropolitan area and would like to discuss your debt relief options, contact the Bentz Holguin Law Firm, LLC at 312-647-2116 to schedule a free consultation with an experienced debt relief lawyer.
