Chicago homeowners are about to pony up more for property taxes.
A mixed vote by the city council approved Mayor Lori Lightfoot’s $16.7 billion budget, including a $23 million property tax hike, according to the Chicago Tribune. The automatic increase is based on the national inflation rate instead of a local one that some economists say makes more sense.
The budget passed today with 35 of 50 votes in favor. The higher levies are part of a $76.5 million property tax package that includes $25 million to repay infrastructure loans and $28.6 million to assess new properties.
Owners of a $250,000 home can expect an increase next year of about $37 in their tax bills. Of that, about $18 will be tied to the national consumer price index — higher than the $12 that would have come by using a local index. Nationally, prices are rising 5.4 percent, higher than the 4.5 percent in Chicago.
The city’s finance department said the city wanted to sync its inflation rate with how the
Chicago Park District and public school system account for rising consumer prices.
It’s reasonable for the city to use the national rate because Chicago is an international city, said Brad Cole, executive director of the Illinois Municipal League.
Yet some economists said the city should use an index that better represents the change in the cost of living because Chicago is a home rule district. Inflation lags locally because the cost of rent and home prices is rising faster in other cities, said Phillip Braun, a professor at Northwestern University’s business school.