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Chicago Property Tax Rates Hold Steady, But Not So the Cost of Living

Throughout greater Chicago, municipalities are struggling with debt and making hard choices about whether to raise residential property taxes in response. Naperville plans a modest 3.3 percent rate increase, while Park Ridge will hike property taxes a stunning 22 percent. Woodridge decided to spare its residents a rate increase and instead will carry a budget deficit of more than $2 million next year. Meanwhile, Chicago has passed a budget that keeps property taxes in check, but don’t interpret that as a check on the Windy City’s cost of living.

First, even without a rate increase, many Chicagoans are likely to see their property taxes go up because of reassessments. But Mayor Emanuel’s budget also includes a higher transportation tax, targeting downtown parking lots with increases in the area of 20 percent. Then there are the increases to car leases, cable TV and cellphones. And that’s hardly the end of it; the sum total of tax and fee increases in the mayor’s new budget means that an average family will pay about $480 more to the city than they did back in 2011. Had the mayor opted to place that whole burden on homeowners, they’d have suffered a 60 percent increase in residential property taxes during that time.

It is clear that taxes have gone up in Chicago, and the reason why is equally clear. According to ChicagoNow blogger Hilary Yelvington, the city still carries a crushing burden from its broken pension system. Ms. Yelvington writes, “Chicago residents are officially on the hook for $63.2 billion in government pensions, health insurance and other debt. That divides up to more than $23,000 per Chicago resident, or more than $61,000 per household.”

Mayor Emanuel has made parking facilities a favorite target of opportunity, raising such taxes three times during his tenure. But how high can those rates go before residents stop taking their cars into downtown, or visiting downtown altogether, thereby drying up those revenues? How high can he raise cigarette taxes before smokers kick the habit or turn to the black market? Higher taxes on tourists can also reach a point of diminishing visitors and diminishing returns.

When all those nibbling measures fail, the mayor will have to contend with the ravenous elephant roaming through city hall. Will the result be pension reform or more costs passed on to Chicago homeowners?

To learn more about how these rising taxes affect you, consult with an experienced Chicago real estate taxation attorney at Gordon & Pikarski today.

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