Cook County judge weighs challenge to referendum appearing on the March ballot
Attorneys bickered over procedural questions in court as real estate groups try to get the question kicked off the ballot.
By Mariah Woelfel
Cook County judge weighs challenge to referendum appearing on the March ballot
Attorneys bickered over procedural questions in court as real estate groups try to get the question kicked off the ballot.
By Mariah WoelfelThe fate of a consequential referendum question on the March 19th primary ballot is still up in the air as a Cook County judge reviews whether a lawsuit aiming to block the ballot measure is filed against the right defendant.
That’s as in-person, early voting begins Thursday and mail-in ballots are already being sent to Chicago voters.
Real estate and business groups are suing the Chicago Board of Elections to block the long-sought referendum question of whether Chicago should increase a one-time tax on property sales over $1 million, and decrease it for property valued under that amount.
Those plaintiffs have “set up a strawman” by suing the Board instead of the city itself, a defense attorney argued in Cook County court Wednesday.
“The city is the only party that can stand in front of this court and present what it did, and whether it was lawful and whether it was proper,” said Charles LeMoine, an attorney for the Board of Elections, referring to a November vote by the Chicago City Council to place the referendum question on the ballot.
“I don’t have that jurisdiction,” he continued, adding the duties of the Board of Elections are administrative in nature. “[The plaintiffs] set up a strawman, which is the Board of Elections” to try to challenge the referendum “and say, ‘Oh, well we should win because the Board of Elections is not going to contest this … The city can and will contest this.”
Attorney Michael Kasper, who represents the real estate and business groups in the case, told the judge “the only entity that can give the plaintiffs the relief that they seek is the Board of Elections” because they print ballots and count votes.
An attorney for the city of Chicago was also present at the hearing and urged the judge to let the city intervene in the case that alleges the referendum question violates Chicago’s municipal code.
“The Board of Elections is not concerned with the municipal code – they’re concerned with the elections code,” said Susan Jordan, with the city’s Department of Law.
Judge Kathleen Burke said she will take several motions “under review and we’ll try to get the order briefly prepared.”
So far, the pending lawsuit has not affected the election process. Voters sending mail-in ballots are still being asked to weigh in on the referendum question, and so will early voters. If a judge rules the question should be barred from the ballot, those votes won’t be made public, a board spokesperson has said.
The lawsuit, filed by building owners and real estate groups, argues the ballot language combines multiple questions in violation of the Illinois Constitution and state law and should be barred from appearing on the March 19th ballot.
The referendum asks voters whether to change the city’s real estate transfer tax for “addressing homelessness, including providing permanent affordable housing and the services necessary to obtain and maintain permanent housing in the City of Chicago.”
If passed, voters would only be authorizing the City Council to change the tax – a vote by alderpersons would still have to occur. Under the proposal, portions of property valued above $1 million would be taxed at higher rates, while property valued under that amount would see a tax cut. At least $100 million annually is estimated to be generated from the tax, which the city plans to use to address homelessness.
The lawsuit was seen as a last ditch effort from opponents to stymie the referendum question, which is a top priority for Chicago Mayor Brandon Johnson, progressive alderpersons and advocates in an effort to dedicate an estimated $100 million to prevent homelessness.
The plaintiffs attempting to block the referendum include the Building Owners & Managers Association of Chicago, the trade association for the city’s commercial office building industry, which boasts it represents “the city’s largest office buildings and a segment of Chicago’s commercial real estate heavily impacted by the proposed referendum,” according to the complaint.
The Chicagoland Apartment Association, the Neighborhood Building Owners Alliance, the Women Construction Owners & Executives (WCOE) Chicago Caucus are also plaintiffs, among others.
They argue that state law lays out a specific process by which the city can adjust the real estate transfer tax, and that including a tax cut for properties under $1 million is unlawful.
The lawsuit argues that state law requires a referendum to only impose a new transfer tax or increase an existing one, not decrease it. That, plaintiffs argue, is in order to prevent legislative “logrolling,” the practice of passing unpopular legislation by bundling it with a more favorable proposal.
The complaint argues it’s a “textbook example” of logrolling.
“It combines a popular idea (lowering taxes) with an unpopular idea (raising taxes) in order to carry the unpopular idea to passage,” the complaint argues.
As the lawsuit plays out, campaigns for and against tweaks to the real estate transfer tax are moving full-speed ahead.
Organizers in support of it have estimated they’ve reached more than 200,000 Chicagoans through door knocking, phone banking and other events. The group ended 2023 with $733,824 in the bank, and broke the $1 million mark this year. That includes a $200,000 donation from the Chicago Teachers Union and $500,000 from the Michael Reese Health Trust. The group will begin to ramp up digital advertising soon.
Real estate groups are also going on the offensive. Illinois Realtors is dubbing the proposal as a property tax, despite it being a one-time tax enacted when a property is sold — which Bring Chicago Home has called an untruthful “scare tactic.”
Illinois Realtors have raised nearly $330,000 since the start of last year, and the group said in total the group plans to devote about $1 million to opposing the ballot question with mailers and digital ads.
Chicago Forward, a 501(c)(4) nonprofit that allows donors to shield their identity, is also raising funds to oppose the tax.
Mariah Woelfel covers Chicago government and politics for WBEZ.