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Tuesday, August 20, 2019

House hears first details of Emanuel plan; Chicago mayor’s tax proposal does have some foes

By Mark Fitton | Sep 24, 2015

SPRINGFIELD — Thursday marked another day of activity but little visible movement in the state Capitol.

The House Revenue and Finance committee began hearing testimony on a call from the city of Chicago for an increase in the general homestead property tax exemption, or amount the state subtracts from homeowner’s assessed valuation as a form of tax break.

The current general exemptions are $7,000 for Cook County and $6,000 for downstate Illinois.

In a budget address earlier this week, Chicago Mayor Rahm Emanuel called for a city property tax increase of more than $540 million, largely to bolster the health of Chicago police and firefighter pension funds.

As part of that plan, the mayor’s administration proposes increasing the general homestead exemption in Cook County to somewhere likely between $12,000 and $15,000, Deputy Mayor Steve Koch told representatives.

Koch said the city administration was still looking for the exact number that would work with the mayor’s proposal for a progressive tax increase to be phased in over four years. He said he did not think it would hit the high end of that range.

The point of the exemption, Koch said, would be to offset enough of the tax increase to hold harmless or not increase the tax liability for owners of homes with market values of $250,000 or less.

The intent, he said, is to “protect those Chicagoans who can least afford the additional burden.”

The proposal was met with some opposition.

Business groups argued the mayor’s proposals shifts too much burden to already heavily taxed and regulated commercial and industrial sectors.

Michael Reever of the Chicagoland Chamber of Commerce said commercial property taxes are already two and a half times greater than residential property taxes.

"Businesses already are paying more than their fair share," he said.

Further, Reever said, the proposal comes on top of other tax, fee and cost impositions such as an increased minimum wage in Cook County, a county sales tax increase, a plastic bag ban in the city and a cloud-computing tax.

An increased exemption is a laudable concept, he said, but the idea that employers can make up the difference is off the mark, Reever said.

Rob Karr of the Illinois Retail Merchants Association agreed.

“While some talk about the city having lower (property tax) rates, that’s great, but in terms of actual dollars are out of their pockets, the city takes the cake and it’s having a real impact,” Carr said.

Carol Portman of the Taxpayers Federation of Illinois also testified, telling committee members that the city’s residential property tax is, if not the lowest in Illinois, among the lowest.

The mayor’s proposal is still being put into legislation, so there was no vote Thursday. A change in the homestead exemption would require legislative approval.

Panel OKs funding bill

In a separate matter, the House Executive Committee sent to the full House a bill to fund human service providers, let road money flow through to local governments and pay Illinois Lottery winners.

Democratic proponents say the appropriations measure would authorize spending $1.8 billion from general revenue funds for human services. Additionally, it would allow $2 billion from other state funding sources, including motor fuel taxes.

The bill has already cleared the Senate on a partisan vote of 36-19.

Republicans have opposed the measure, saying Democrats are practicing piecemeal budgeting and knowingly proposing more spending than the state can afford.

Standoff continues

Barring a special call from the governor or one of the presiding legislative officers, the House and Senate won’t convene again in September.

The Senate is next scheduled to meet Oct. 6 and the House on Oct. 20.

Illinois is finishing its third month of fiscal year 2016 without a budget in place as first-term Republican governor Bruce Rauner and legislative Democrats remain at loggerheads.

The governor complains the Democrats have sent him a plan billions heavier in spending than estimated revenue. And Rauner says he won’t sign off on more revenue until he gets what he considers fundamental reforms.

Democrats complain Rauner and the GOP have been unwilling to work with them until the governor gets movement on his agenda items, which the Democrats do not consider directly related to the annual budget.

Rauner answers that his proposals are necessary to improve the state's economy.

Mark Fitton is a reporter for the Illinois News Network, a division of the Illinois Policy Institute.

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City of Chicago Illinois Governor Bruce Rauner Illinois House of Representatives Illinois Policy Institute Illinois Retail Merchants Association

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