Home | State Tax Profiles | Tax Calendar | Locations | Client Connect Login

Chicago Budget Raises Property Taxes

by Phil Utterback, Chicago, December 2020

 

Chicago’s $12.8 billion budget plan for 2021 will increase property and gas taxes, eliminate vacant city jobs, and tap the city’s rainy-day fund to close a $799 million shortfall triggered by the COVID-19 pandemic.

 

Hikes

 

The property tax increase will total $94 million. The increase in the budget plan is twofold and includes:

 

1.

 

A one-time property tax increase generating $43 million

2.

 

A plan to raise property taxes each year with inflation, tying it to the consumer price index.

 

There will also be an increase to the personal property lease tax applied to computer leases of cloud software and cloud infrastructure.

 

In addition, Chicago’s 5-cent-per-gallon gasoline tax will rise to 8 cents per gallon.

 

Cuts

 

Mayor Lightfoot’s original budget plan included roughly 350 layoffs of city workers, which she later announced would be avoided after working with the Chicago Federation of Labor.

 

Personnel changes in the budget still include the elimination of roughly 1,900 vacant positions from all city departments, including hundreds in police and fire, as well as five furlough days for some non-union employees. The personnel changes account for roughly $106 million in savings.

 

Other one-time measures include the use of $30 million in rainy-day funds, $74.1 million from surplus tax increment financing districts, $59 million from sweeping aging revenue accounts, and selling city land.