Late yesterday afternoon, Mayor Rahm Emanuel’s press office released the outlinefor today’s FY2016 budget address, featuring a property tax increase with a four-year phase-in period. The basics of his plan, to be officially announced in a 10:00 a.m. speech today, include annually:
$544 million of property taxes, phased-in over four years, starting with $318M as a supplemental levy in FY2015, reports Greg Hinz. All added revenue would be committed to police and fire pension payments.
$170 million in city government management savings, through programs like closing CBD TIFs and healthcare reforms.
$60 million from a $9.50/month fee per household for garbage pickup.
$60 million from new rideshare (Uber and Lyft) and taxi fees.
$13 million from streamlining building permitting.
$1 million from new e-cigarette taxes.
The city property tax increase is on top of a $45 million additional Chicago Public Schools levy the mayor will ask the Council to approve to pay for school capital improvements.
The Mayor’s Office’s 2015 financial analysis released August 2 pegged the city’s budget deficit at $754M. But that’s assuming Springfield passes SB777, which allows the city to stretch out police and fire pension payments over a longer period. If SB777 is not passed and signed by Gov. Bruce Rauner–and he has not yet indicated that he will sign it–then the city’s FY2016 budget hole grows to $975M, according to the analysis. (See our August 3 report for more detail.)
Thus, the Mayor’s plan, which we add up to $848 million in additional annual revenue by FY2018, will need an additional tax levies or cuts if SB777 is not enacted this year.
Also in the mix is the political necessity of a property tax exemption or rebate increase. The Mayor’s Office estimates the property tax increase would equate to $600 more a year for someone with a $250,000 house, a meaningful number for those on a fixed income. Again, the the Mayor’s Office press release says Emanuel is working in concert with Speaker Mike Madigan and Senate President John Cullerton for an exemption increase, but Gov. Bruce Rauner last week said he would not support any exemption changes without passage of his Turnaround Agenda package.
Council members have privately told Aldertrack they are examining ways the city could create an ordinance through a rebate program (for example, the Progressive Caucus program discussed below) if Springfield does not act, but such programs would require new bureaucracy and would not work as smoothly as extending existing exemption programs.