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Chicago Mayor Rahm Emanuel Seeks $500 Million Property Tax Hike

Mayor Rahm Emanuel

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Mayor Rahm Emanuel is poised to raise property taxes by $500 million for police and fire pensions and school construction and impose a garbage-collection fee to generate $100 million more, City Hall sources said Wednesday.

The $500 million property tax increase will cost the owner of a home valued at $250,000 roughly $500 more each year. The garbage fee — widely viewed as a back-door property-tax hike — will be a monthly assessment of roughly $11 to $12 per household.

The mayor’s 2016 budget also will include a tax on e-cigarettes and other smokeless tobacco products — roughly equivalent to the $7.17 tax slapped on a pack of cigarettes purchased in Chicago — and a $1 a ride surcharge on Uber and other ride-hailing services.

Sources said the surcharge will be part of a broader package of reforms to level a playing field that has allowed ride-hailing companies to siphon business from taxicabs.

A penny-an-ounce “fat tax” on sugary soft drinks aimed at curbing obesity might also make its way onto the smorgasbord of tax and fee hikes served up by the mayor, depending on the outcome of a public hearing spearheaded by the tax’s champion: Ald. George Cardenas (12th), chairman of the City Council Committee on Health and Environmental Protection.

The 60 percent increase in the city’s property tax levy, along with a garbage fee, ride-hailing surcharge and smokeless tobacco tax, make up the largest collection of tax and fee hikes Chicagoans have ever seen.

But City Hall sources said Emanuel is determined to eliminate the city’s structural deficit, put police and fire pensions on solid footing and eliminate risky financial practices that his predecessor and political mentor, former Mayor Richard M. Daley, used to mask the true cost of city government.

Struggling to solve a $30 billion pension crisis that has dropped the city’s bond rating to junk status, Emanuel needs, even under the best-case scenario, $754 million in new revenue to balance his 2016 budget and shore up police and fire pensions.

And that’s not counting the $9.5 billion pension crisis at the Chicago Public Schools.

During a Jan. 30 debate that preceded Round One of the mayoral sweepstakes, Emanuel ruled out a post-election property tax increase but pointedly confined the guarantee to the city’s operating shortfall.

Read more about this story at Chicago Suntimes

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