Faced with a gaping deficit and a massive pension shortage, Chicago’s economy has fallen onto tough times, a situation that has been highlighted by the city’s junk bond rating and its disastrous effect on local taxpayers. In order to remedy the situation, Mayor Rahm Emanuel has proposed a plan that would raise property taxes by $588 million over the next four years, in addition to slew of other taxes and charges.
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Emanuel will approach Chicago’s City Council Tuesday to unveil his plan, which is bundled into his 2016 budget and would call for the $588 million to help replenish police and fire department pension funds and to aid in the construction of new schools. The owner of a home worth $250,000 could expect an increase of $588 on their tax bill. The brunt of the higher taxes will be collected in 2016.
Another revenue source for the city will come in the form of a $9.50 per month garbage collection fee, essentially another form of property tax levied against each household. Around 613,000 homeowners across the city will be saddled with an additional $114 in fees each year in order to maintain their trash pick-up service. Senior citizens will receive a 50% discount. Trash will still get picked up even for those who don’t pay due to the city’s widespread rodent problem.
While a variety of new taxes will put a squeeze on the average Chicago resident’s budget â€“ a new e-cigarette tax, a 15 percent raise in cab fares, a 50 cent surcharge on all cab rides, and a $5 surcharge on Uber rides in exchange for increased pickup locations â€“ the garbage collection fee remains the most controversial development. Emanuel has argued that suburban residents actually pay more than those in urban areas, which means that the new fee will level the playing field.
In all, Emanuel’s proposal represents a 72 percent increase in property taxes across the city, and the mayor has expressed confidence that higher taxes will help restore the city. â€śWith this budget, we will build on our progress by charting a new course for Chicagoâ€™s future and ensure that we are securing the retirements of our police and firefighters in a way that does not hurt those who can least afford it,â€ť he said in a news release.