$300 million property tax hike in Chicago mayor’s 2025 budget proposal, but no layoffs

CHICAGO — Despite continued promises not to raise property taxes associated with his campaign for mayor, Mayor Brandon Johnson proposed doing just that in the $17.3 billion city budget plan he unveiled Wednesday.

Johnson’s 2025 spending plan eliminates a projected $982.4 million budget deficit but includes the largest property tax hike since 2016. That’s because many Chicago homeowners are already facing higher property taxes following Cook County’s three-year reassessment.

Johnson argues that without property tax increases, layoffs and furloughs would be inevitable, affecting thousands of city workers, including Chicago police officers and firefighters.

To avoid this alternative, which he called “unacceptable,” Johnson proposed a $300 million property tax increase in his second budget plan as mayor at City Hall. In a statement, the mayor’s office said property owners would see their property tax bill increase by an average of 4%, using 2023 assessed values ​​to reach a total of $300 million.

Johnson told the City Council that without a property tax increase, the city would be forced to cut its workforce by 17%.

“This is a difficult decision,” Johnson said at a press briefing on Tuesday before unveiling his proposed 2025 budget. “Facing the situation between laying off police officers and firefighters and preventing those layoffs, it was a very painful process.”

RELATED: Chicago City Council approves debt refinancing plan to address $1 billion budget deficit

Johnson publicly presented his proposal to the City Council, reiterating how difficult it was for him to decide to raise property taxes and break his campaign promise. Ultimately, the mayor said, the decision had to be made to fund pensions without deferring costs into the future.

“Our city employees have their pension contributions deducted from every paycheck—they never miss or delay a deposit into the system,” Johnson said. “We must fulfill our obligations because
Fine. And when we invest in our retirees and our workers, it helps our communities
energetic and lively.”

“I understand that today I am asking families to make an effort and do a little more
to make sure their neighbors don’t get fired, and that we
there will be no need to shut down vital city services,” he added.

More than a dozen City Council members quickly spoke out against the property tax increase.

“Hopefully today we will be called into the room to begin a discussion to balance this budget without a TIF morass and a huge property tax increase that will hinder the entire city of Chicago,” said Ald. Anthony Beale (9th Ward).

Ald. Brendan Reilly (42nd District) called the budget proposal “irresponsible.”

“I think the mayor needs to open the books,” he said. “He needs to take a closer look at the funded vacancies he is taking responsibility for eliminating.”

When asked about the property tax proposal, Gov. J.B. Pritzker echoed the reaction of many.

“Property taxes are too high for everyone. If you ask me this question, I think it is a simple question for everyone,” he said.

The City Council has until the end of the year to approve the budget, which now poses an additional financial burden on Chicago homeowners. The City Council did approve a $588 million property tax increase in 2015 under then-Mayor Rahm Emanuel. This would be the biggest tax increase since then.

The mayor needs a 26-majority vote in the City Council to pass a budget. Asked Tuesday by a veteran Sun-Times City Council reporter if he was worried about getting out the vote, Johnson responded, “Do I look worried?”

“I have a value system that I don’t compromise on, but I will work out the details of my values,” Johnson told reporters on Tuesday.

“Non-starter”

Johnson’s proposal to raise property taxes is an immediate hurdle for at least some City Council members if he wants to get the necessary votes to pass his budget.

Fourteen Alder residents signed a letter to the mayor dated Tuesday calling the property tax increase “an unfortunate experience for us and our constituents.” They cited a poll that found 79% of residents “strongly oppose” raising property taxes as a way to increase city revenue.

“We cannot support a budget proposal that includes an increase in property taxes. Period,” the letter says.

Other demands the 14 aldermen are making of the mayor if they want to approve his budget include renewing the city’s contract with ShotSpotter and redirecting migrant funds.

The letter was signed by Olds. Brian Hopkins (2nd Ward), Anthony Beal (9th Ward), Peter Chico (10th Ward), Marty Quinn (13th Ward), Raymond Lopez (15th Ward), Derrick Curtis (18th Ward) 1st Ward), Silvana Torres (23rd Ward), Monique Scott (24th Ward), Felix Cardona (31st Ward), Scott Waguespack (32nd Ward), Gil Villegas (36th Ward), Anthony Napolitano (41st District), Brendan Reilly (42nd District) and Jim Gardiner (45th District).

WGN caught up with Lopez on Wednesday as he walked into City Hall.

“A number of alders, including myself, have serious concerns about what the next budget for 2025 will look like,” Lopez said.

He also said there are other options to raise revenue besides raising property taxes, calling the mayor’s proposal to do so “the complete contradiction of what he ran on, what he promised and what he won on.”

“We know it’s very easy to get a good deal on property taxes and raise taxes to make up the difference,” Lopez said. “What we haven’t seen is a concerted effort to work with the mayor to try to see where we can cut government spending, where we can reduce some of our liabilities before asking taxpayers for another $1.”

The 14 alders who signed the letter to Johnson were expected to respond to their requests Wednesday, after Johnson presented his budget proposal.

On the other side of the issue, Ald. Jason Ervin (28th District) supports Johnson’s proposal as “reasonable.”

“I think the smart thing for us to do is stay on course for relatively inflationary adjustments so we don’t have to do big hikes,” Erwin said.

Other budget highlights

Additionally, under Johnson’s budget plan, the city would post a $750 million tax incremental financing (TIF) surplus, with Chicago Public Schools receiving a significant portion of that amount.

Other highlights of the mayor’s budget proposal include:

• $145 million in federal COVID relief money under the American Rescue Plan Act (ARPA) will be used for community investments. Of this amount, $44.9 million will be spent on youth and economic development, $20 million on mental health and wellness, $31.8 million on public safety, $33.6 million on housing and homeless support, and 11. $4 million for “good governance.”

• The Chicago Police Department’s budget increases year after year.

• The city’s budget deficit is $982.4 million, driven by rising personnel and pension costs.

• Expenses in FY 2025 increased 3.2% compared to FY 2024. Annual appropriations from the city’s various funds will total $17.3 billion, mostly from corporations and businesses. This is $532.9 million more than in 2024.

Investments

Among the investments outlined in the mayor’s budget plan are $350 million for housing and support for the homeless, including $40 million to expand the city’s shelter network, $29 million to help people move from emergency shelters into stable housing, and $23 million to increasing the availability and affordability of broadband access.

Assistance to migrants is included in the city’s regular homeless support structure.

RELATED: Johnson announces changes to city’s migrant population plan

Additionally, the budget provides $200 million for public safety, including $15 million to address community violence, $9.4 million to support victims and $5.4 million to reentry and workforce development.

Other spending includes $2 million to expand mental health services, $52 million for youth employment opportunities and $30 million to support small businesses.

Also in Johnson’s budget proposal, the city includes an upfront pension payment of $272 million.

Read more: Latest Chicago news and headlines.

The mayor concluded his presentation Wednesday by thanking his staff and city employees and noting the progress made in his first year as mayor.

“It is in this spirit of collaboration that we have made tremendous progress in our first year
my administration, and we have set our city on the path to true equality by promising to never
will leave black and brown communities behind again,” Johnson said.

“With this budget, we are laying the foundation for continued progress for years to come.”

Hearings with the department and tax authorities were scheduled for Wednesday after the mayor spoke. The Finance and Budget Committee meeting is scheduled for November 21, and the public hearing is scheduled for December 2.

Copyright 2024 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

For the latest news, weather, sports and streaming video, head to WGN-TV.