More property tax increases will be inevitable in the next few years to help fund Chicago’s government pension funds. That’s what aldermen were told at the start of this year’s City Council budget hearings.
Chicago taxpayers have already been hit with nearly $1.1 billion in property tax increases primarily for police, fire, teacher pensions and school construction in recent years.
Other taxes have also increased for such necessities as water, sewer, garbage collection, and telephone service.
What's Happening Now
In late October, the Chicago Board of Education approved a $5.7 billion budget that includes roughly $225 million in tax hikes. It also authorized the sale of more than $1 billion in debt to help balance the budget and take on school repair projects.
The Chicago school district's spending plan includes an 8.3% property tax hike largely meant to prop up the city’s teacher pension fund and other expenses unrelated to the classroom.
Chicago is required by law to keep city government pensions on track to achieve 90% funding by the year 2048. By the city’s own estimate, police and fire pension costs will rise by $297.3 million or 36% in 2020. Costs for the Municipal and Laborers plan will grow by $330.4 million or 50% by 2022.
Chief Financial Officer Carole Brown said the city's $543 million property tax increase approved two years ago has helped. However, increased funding will still be needed in 2020 for police and fire pensions. The increase for Muni and Laborers will be needed a couple of years after that.