Chicago Mayor Lori Lightfoot’s 2023 budget will no longer include a 2.5% property tax hike as previously expected, WBEZ has learned — an 11th-hour deal sweetener as the mayor works to pass a budget amid historic inflation, all while asking voters for another four years in office.
Lightfoot had previously announced her budget would likely bump property taxes by $42.7 million, and hit owners of a $250,000 property by about $34 next year. The increase, tied to the rate of inflation but capped at 5% under city ordinance, helps the city make its annual pension payment required under state law.
But in a statement obtained by WBEZ on Thursday, Lightfoot says the city will meet that obligation without a property tax increase, citing better-than-expected revenues in 2022 and rosy revenue projections for next year. She’s expected to outline the news in detail during her annual budget address on Monday.
“As our city continues to rebound from the pandemic, our revenues continue to improve helping us to close the gap,” the statement reads. “As a result of this strong improvement in revenues, we have determined it is important to give our taxpayers some additional relief.”
“This one time relief keeps our city on the course we’ve set in our previous budgets: protecting taxpayers, keeping our promises to workers on pensions, and making historic investments in public safety, mental health and public health in general and much more,” the statement said. “To be clear, our pension obligations are real and continue to grow in the out years.”
In her August announcement of the expected increase, Lightfoot herself downplayed the $34 – likening it to a family dinner at Al’s Italian Beef.
“When all is said and done, a homeowner with a house value at, say, $250,000 will pay an additional $34 a year,” Lightfoot said in August when she announced the expected increase. “That’s about the price of an Al’s Italian beef — hot, dipped, with extra cheese — for a family of four.”
In that announcement, Lightfoot said it would have been easy for her to skip a property tax increase as she seeks reelection next year, but cautioned that the city’s pension obligations still need to be paid.
But now, undoubtedly, the move gives the mayor another talking point on the campaign trail as she faces at least eight challengers in the February 2023 race for control of City Hall’s 5th floor.
And it comes after some of Lightfoot’s allies on the City Council publicly criticized the mayor for pushing a property tax increase amid other economic challenges like pandemic recovery and inflation — perhaps throwing into question whether she’d have the votes to pass her spending plan.
The property tax increase is automatic, and tied to inflation, unless the mayor decides to forgo it, so aldermen can’t vote it down separately from the budget.
“If she’s smart, she’ll get rid of the property tax increase and deal with what she has to deal with [financially] next year,” Ald. Emma Mitts, 37th Ward, told the Chicago Sun-Times this week. “Retailers and businesses are hurting. All I keep hearing from people is her numbers are bad in their wards. If you’re running for reelection, why would you vote for a tax increase?”
The mayor would have also had to convince incumbent aldermen seeking another term to vote for the property tax increase and potentially explain their decision to voters.
Lightfoot’s Monday address will kick off a series of budget hearings anticipated to last two weeks, where aldermen will grill department heads about their spending over the past year before voting on the budget by the end of the year.
In August, Lightfoot announced more good news for taxpayers: that this year’s anticipated $128 million budget deficit was the “lowest in recent memory.”
This is the first year Lightfoot will slash a property tax increase from her budget. Last year, the spike amounted to about $38 for the owner of a $250,000 home.
Mariah Woelfel covers Chicago city government at WBEZ. You can follow her on Twitter @MariahWoelfel.