'Everything is on the table': Chicago property tax increase possible as city faces $369 million deficit
July 31, 2012 (CHICAGO) (WLS) -- The City of Chicago has cut its projected deficit almost in half, but it still faces a $369 million shortfall. One very unpopular solution to fill the gap could be a property tax increase.
Chicago's 2013 "budget battle" began Tuesday with a report on the city's projected deficit, which is huge, but a lot lower than expected.
"The deficit we had last year has now been cut in half for 2013," said budget director Alexandra Holt.
Holt said the good news -- that Chicago's projected 2013 deficit had shrunk from $740 million to $369 million -- was due in part to structural changes implemented by the Emanuel administration during its first year. They include grid-based garbage pickup, a wellness program for city employees and workers compensation reforms.
And, the economy has improved, providing a boost in expected tax revenues.
"We have seen some upticks in some of the economically sensitive revenues," Holt said. "So we've seen a little uptick in income tax, we've seen an uptick in sales tax, and all of those things have helped us."
At two ribbon-cuttings Tuesday, the mayor would not take questions on the budget projection or any subject.
With a $369 million deficit still on the table, aldermen are bracing themselves for the inevitable debate over whether a property tax increase is in order.
"Everything is on the table. But the last thing we want to talk about is a property tax increase," said 9th Ward Alderman Anthony Beale.
"I'm gonna fight to keep that as a very last resort," said 25th Ward Alderman Danny Solis. "But at this time I couldn't say absolutely, positively not."
"If the government is running efficiently, we need revenue in order to make this work, then a tax increase is possible," said 28th Ward Alderman Jason Ervin. "I believe the mayor at this point is not looking at a tax increase because he believes there's still some efficiencies that can be garnered."
After ruling out a tax increase in his first budget, the mayor has made no public statements relative to 2013. But Holt says Emanuel has already told her and others to look elsewhere to balance the budget.
"It's been very clear to me and everybody else that he is not going to support a property tax increase," said Holt.
The budget will be one of the first orders of business for the City Council when it returns to work at City Hall in September. It is unclear how that projected budget deficit might be affected by new contracts for city police and firefighters. Those negotiations are under way.
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