No Doubt About It: Chicago Could Use Prop 13

Joel Fox
Editor and Co-Publisher of Fox and Hounds Daily

For anyone who doubts that the desire to fund public sector pensions has to do in part with the moves to raise property taxes by changing Proposition 13 let them look to Chicago. Mayor Rahm Emanuel is proposing the largest property tax increase in history for Chicago property owners because he needs money to cover pensions.

According to the local CBS station in Chicago, “the mayor defended his push for a major property tax hike, acknowledging it would be a tough pill to swallow for taxpayers, but saying it’s necessary to shore up police and firefighter pension funds, restore the city’s worst-in-the-nation bond rating, and solve the city’s long-standing financial crisis.”

We can safely assume that the pension obligation is for more than police and firefighters but you know the old political playbook when it comes to this issue.

The Chicago Tribune reported that during Emanuel’s first term he “avoided major tax hikes in favor of a series of smaller tax, fee and fine increases that together resulted in the equivalent of a 60 percent increase in city property taxes for the average homeowner.”

Apparently that 60-percent equivalent property tax increase was not enough. The newly proposed increase would add an extra $500 in property taxes to homes valued at $250,000.

Residents are not amused. According to the CBS account, one man shouted at a meeting with the mayor, “You raise the taxes, you’ll see a mass exodus of people getting the hell out of this goddamn city.”

For those of you who were not around a few decades ago, we used to have similar sentiments hollered at public officials before the voters rose up and set new rules for property taxes with Prop 13. Since the measure passed, property taxes have been California’s most stable tax, revenue for local governments has increased well above inflation, and most importantly, Prop 13 gave certainty and a sense of security against outrageous tax increases to property tax payers.

Chicagoans would like to have some of that certainty right about now.

The current effort to change Prop 13 and raise property taxes would be the first step to bringing back insecurity for taxpayers by establishing a subjective market value of property as the basis for property tax calculation on commercial property.

Who knows where it would go from there?

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