Mayor Daley's annual budget hearings are designed to deceive more than enlighten, but even by Chicago standards, the mayor's August 23 performance at the South Shore Cultural Center was a masterwork of dissimulation. The most telling part of last Thursday's hearing--the first of three--was what the mayor didn't say.
At the start of the meeting he did mention that taxes would be rising--the city faces a $217 million budget deficit, after all. But he went on to blame it all on house speaker Michael Madigan, senate president Emil Jones, and Governor Rod Blagojevich, especially the governor. According to Daley, our state leaders are forcing up local property taxes by failing to dedicate more state funds to education.
"How can we convince the governor on this?" Daley asked the crowd at South Shore. "We can all go to church and pray. But praying doesn't bring in any money."
It's true our reliance on property taxes to fund education leads to atrocious inequities, as wealthier towns (like Winnetka, Lake Forest, or Oak Brook) get to spend more money on their children than poorer ones (like Chicago, Dolton, or Maywood). But the mayor's hardly a helpless spectator at the mercy of the bad boys and girls in Springfield.
As you may recall from previous columns on this subject, property taxes are essentially calculated by multiplying a tax rate by property assessments to equal a levy, which is the amount the city, schools, county, and other public bodies will have to spend. The more a property is worth--the higher its assessment--the more the owner will pay in taxes. The problem is that as a result of gentrification, assessments have been leaping skyward, in many cases more than doubling. Long-term residents and economically vulnerable home owners on the south and west sides are being priced out of the city, and even more affluent residents are feeling the sticker shock. A tax cut would bring some relief, but Daley has no intention of cutting the tax rate. He needs to keep revenue coming in, not just for the sake of the schools, as he said at South Shore, but, among other things, to feed tax increment financing districts, which currently gobble up more than $400 million a year in property tax revenues.
Daley didn't mention TIFs at last Thursday's hearing, for obvious reasons. He clearly doesn't want people to link his pet program with rising taxes just as the bills are about to go out, and communities all over, including South Shore, are likely to be hit hard. I can't tell you how hard, because though the next round of tax bills was slated to go out in August, Cook County assessor James Houlihan has had his hands tied by the ongoing stalemate down in Springfield. The old home owner's exemption expired this year, and the county can't calculate tax bills until it knows what the new one will be--or if there will be one. After a protracted struggle the General Assembly passed a Madigan-backed bill governing the exemption earlier this month. The governor has yet to sign off on it. But he's not the only villain here.
Earlier this year the senate passed a bill that would have raised the home owner's exemption to $60,000, but it got tabled in the house. Houlihan, with backing from Jones, then pushed for legislation raising the exemption to $40,000 for the next three years. Madigan's bill, meanwhile, favored a tiered approach in which the exemption for most home owners would top out at $33,000 this year, $26,000 next year, and $20,000 in 2009. Houlihan's larger exemption would save home owners thousands more in property taxes than Madigan's approach would, but Daley's position was unclear. As more than one state rep has told me, the mayor played it both ways for months, letting it be known to legislators that he'd agreed to back the Madigan bill even as he gave public lip service to Houlihan's proposal.
Back in May Houlihan called a rally to draw attention to his plan, and Daley was supposed to attend. Not only was the mayor a no-show, he held a rival press conference, upstaging Houlihan's rally. In July Houlihan put together a coalition of 49 aldermen to call for the larger exemption (the only alderman who didn't sign on was Frank Olivo, who represents the 13th Ward, Madigan's home turf). Afterward local state reps who had supported Madigan's bill expressed their irritation. They felt that by pointing to the bill's inadequacies the aldermen were grandstanding and trying to make them look bad. They also feared that Daley was about to double-cross them by pulling his support. But at a private meeting held shortly after, Daley's top legislative aides assured state reps that the mayor still supported Madigan's bill. The aides claimed the mayor hadn't known what the aldermen were up to, an explanation exactly no one buys.
With the mayor on record as supporting it, the bill with the lower exemption passed both houses earlier this month. The governor's press aides tell me he hasn't decided whether he'll sign it.
What does this all mean for the south-siders who crowded into the South Shore Cultural Center to hear the mayor? Many of them probably won't be able to afford to live in their neighborhoods for much longer. As Houlihan's office has been warning, rising taxes together with high financing rates could sweep hundreds if not thousands of residents out of the city, particularly from west- and south-side communities like Lawndale, East Garfield Park, Woodlawn, and Washington Park.
If it doesn't happen with this year's tax bills, it will happen with next year's. But of course the mayor didn't mention that either.
See archived columns on property taxes and TIFs at chicagoreader.com.
Art accompanying story in printed newspaper (not available in this archive): illustration by Laura Park.