Aug
01

Should Chicago Real Estate Owners Brace for a Property Tax Increase?

August 01, 2012

Chicago Mayor Rahm Emanuel on Tuesday released his second Annual Financial Analysis (AFA) on the city’s projected deficit for next year, and though the figure is nearly 50 percent less than it was originally projected to be, the city is still estimated to be short $369 million.

As a result: Should Chicago real estate owners brace for a property tax increase?

During last year’s AFA, it was projected that the city would face a $741 million budget gap in 2013. But massive changes around the city, including the transition to a grid-based garbage pickup, has reduced the deficit.

As a result: This year’s budget gap is the lowest the city of Chicago has had since 2009.

“By making the tough but necessary choices in 2012, we were able to cut our budget gap in half in one year without using one-time fixes,” said Mayor Emanuel. “But this will not be done in one year and while a $369 million budget shortfall is a substantial gap, we are continuing to make the difficult but necessary choices as we right the city’s financial ship and stabilize its fiscal future.”

So, is raising property taxes going to be one of those “difficult but necessary choices”? I believe the answer is no.

Mayor Emanuel refused to consider a property-tax increase during his first budget in office, and while he hasn’t officially said no to one this year, there are rumblings that he believes there are more structural holes in the budget that can help make up the gap, and he is pushing everyone to find them.

Even residents. Mayor Emanuel is reminding Chicagoans that there is a budget website, ChicagoBudget.org, where anyone can submit ideas and solutions on how to successfully move the city into the future, hopefully not at the expense of the Chicago real estate owner.

“As we move forward with the 2013 budget process, my administration continues to be open to ideas from across the city on how to tackle the challenges we face and continue to put our city on solid financial ground,” said Emanuel.

Plus, this year’s AFA predicts additional increases of $466 million in 2014 and $580 million in 2015 in the absence of additional reform. Revenues are projected at $2.83 billion and expenses are projected at $3.19 billion for 2013.

Mayor Emanuel will present his 2013 budget proposal to the City Council in October. Read the whole report at ChicagoBudget.org.

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Tracey

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