Chicago’s New Budget Contains Harmful Taxes and Unsustainable Programs | Citizens Against Government Waste

Chicago’s New Budget Contains Harmful Taxes and Unsustainable Programs

The WasteWatcher

Chicago residents seeking a reprieve from high taxes and wasteful spending will find themselves out of luck under the city’s $16.7 billion fiscal year (FY) 2022 budget, a 30 percent increase over FY 2021.  Mayor Lori Lightfoot (D) called it “the most progressive ever in the history” of the city. 

The budget includes a $76.5 million increase in property taxes and allocates funds from federal COVID-19 relief programs for a universal basic income (UBI) program targeting low-income individuals.  These provisions, promise to increase the burden on taxpayers, drive away businesses, and entrench unsustainable spending.

The projected yearly property tax increase ranges from $72 to $180 for each property, adding to the excessively high tax burden Chicagoans currently experience.  A 2019 Tax Foundation study found that state and local sales taxes alone make Chicago the highest taxed city in the nation.  Illinoisians statewide pay the second highest state property taxes in the nation, behind only New Jersey.  The increase in city property taxes promises to not only augment the burden already carried by Chicago taxpayers, but also inhibits the city’s growth and recovery.  As the Chicagoland Chamber of Commerce noted, the budget includes “the second consecutive increase in property tax levy in two years,” with both coming at the same time taxpayers are struggling to recover from the impact of the pandemic and a multi-month statewide lockdown.

On top of its assault on property owners, the city’s budget allocates $32 million in federal COVID relief funds to establish a universal basic income (UBI) program.  Under this new program, 5,000 Chicago residents who earn less than $35,000 will be selected to receive $500 checks every month from the city.  The program expires in 2024.

The use of federal funds to supplement Chicago’s budget underscores the pitfalls of federal programs billed as relief.  Federal pandemic relief funds, Illinois Policy Institute’s Senior Director of Budget and Tax research Adam Schuster observed, have “grown Chicago’s budget 56 percent since 2019, despite modest local-source revenue losses during the pandemic.” 

Fran Spielman of the Chicago Sun Times reported that while property taxes will rise in 2022, “Mayor Lori Lightfoot will hold the line on all other taxes, fines and fees, thanks to a once-in-a-lifetime avalanche of federal stimulus funds.”  Chicagoans should prepare, however, for the inevitable increases in property taxes in addition to elevated rates in other taxes, fines, and fees once the federal relief well runs dry.

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