Frank Spielman writes the truth Daley's Taxes Up Again
Property tax hike may be Daley's only option
BUDGET GAP | Sure to anger some, but must plug $217 mil. hole
August 21, 2007
BY FRAN SPIELMAN City Hall Reporter email@example.com
Mayor Daley hates raising property taxes about as much as Chicago homeowners despise paying those increases.
Part of it is fear of political backlash. The other is a pragmatic desire to leave the door open for Chicago Public Schools to tax to the max, as it has in 10 of the 13 years since Daley's school takeover.
But with a $217 million budget gap and the next election four years away, it looks like the mayor may have no choice but to bite the bullet this time. That's even after crusading for property tax relief to soften the blow of reassessment increases.
Mayor Daley, seen last week, has called raising property taxes a “last resort” but won’t rule it out.
He can either raise property taxes by the $30 million maximum allowed by the city's self-imposed cap or lift the ceiling altogether.
Chicago property owners also face higher water and sewer rates to finance the costly switch to automatic meter readers. An array of other tax and fee increases are in the cards as well.
"I think he'll go to the cap. It'd be foolish not to," said a City Hall source, who asked to remain anonymous. "They need every nickel they can find. He should have done it a long time ago. The more you wait, the worse it gets."
Another source argued that Daley would have been far better off raising property taxes by $10 million or $15 million a year all along to keep pace with rising personnel costs.
Instead, he has cut property taxes twice -- in 1990 and 1999 -- and raised the city's overall levy by just $92.7 million in 18 years. That's less than 1 percent a year.
None of the city's $713.4 million property tax levy is available for day-to-day operations. It's largely eaten up by pension obligations.
"How do you go on like that while giving police and fire pay raises every year and with pensions and health care going off the charts? They're all afraid of the headlines. But, take the polls and stuff 'em. You need to govern," the source said.
In a recent interview, Daley repeated his mantra that raising property taxes is a "last resort." But, he also said, "You can't rule anything in or out. If you do, then basically you're kidding yourself. You leave all options open."
Last month, Daley followed two rounds of mid-year budget cuts with an alarming announcement: the city's $5.6 billion preliminary 2008 budget has a $217.7 million hole, the second-largest in a decade.
Some aldermen reacted with a promise to steer clear of the dreaded property tax.
Sources said the aldermanic door-slamming angered Daley, prompting some to conclude the mayor intends to raise the tax everyone loves to hate.
"Does that mean everybody will go for it? No way. The Tom Allens, Brian Dohertys and the rest of the Northwest Side [bloc] won't go for it. But, they'll have 26 votes," a City Hall source said.