The city announced today that it's facing a $217 million budget shortfall and might have to raise taxes in the coming year.
As you may recall from last year's tutorial on taxes, budgets are projections. Each year Mayor Daley predicts how much money he expects to generate in taxes and fees and how much money he expects to spend. If the latter is greater than the former, he has to raise taxes to make up a deficit. If not, taxes remain flat.
Last year at about this time, Daley was gushing that his managerial expertise had left the city flush and there would be no need to raise taxes. On the campaign trail last fall he announced that the city was facing a $65 million shortfall, the lowest in five years. Now he's saying the economy was worse than expected, with the real estate market sagging--hence the huge deficit.
I don't think the economy's the big difference. The difference is that Daley was running for reelection last year and this year he's not. Think of the increases in taxes and fees as Daley's way of saying thanks for your vote, suckers.
And the city did hit you with tax increases last year--they just didn't tell you about it. I know, I know, in today's article about the looming deficit, the Trib claimed that "taxpayers escaped any increase a year ago."
I don't know why, but the big papers aren't telling you the whole story about your property taxes. Every time the city creates a tax increment financing district it effectively raise your property taxes, as the other taxing bodies raise their tax rates to compensate for the loss of revenue. There are now 153 TIFs in Chicago, diverting over $400 million a year in property taxes. And the city keeps creating new TIFs almost every month. TIFs feed the slush fund the city uses to line the pockets of the mayor's developer friends.
In a month or two the second-installment property tax bill will come out, and scores of home owners on the west and south sides will get clobbered with tax hikes approaching 100 percent. In addition, the soaring taxes will make communities like Washington Park, Woodlawn, Garfield Park, and Lawndale unaffordable for poor or working-class people who might want to live there.
The only mystery is who Daley will blame for the coming tax hike. I predict he'll blame an economic downturn, Cook County assessor Jim Houlihan for the high assessments, and the general assembly for not giving him more money for the schools. I guarantee he won't say a word about the TIFs.