Chicago Mayor Lori Lightfoot’s decision to tie annual property tax increases to inflation could potentially have a huge impact on the bills that taxpayers will receive in coming months, but she says that there are discussions underway to “put some guardrails” on the process moving forward.
Lightfoot was asked about the plan on Monday after reports pointed out that Chicago property owners could see a 5% increase in their property tax bills without city action.
“We’ve started a discussion internally with our finance team, which we will present a plan as part of our budget to make sure that there isn’t a significant burden on taxes for our taxpayers,” she said.
Early in Lightfoot’s term as mayor, her administration proposed tying the increase of property taxes to the Consumer Price Index, a move Lightfoot said would be preferable to the previous timing of increases, which she argued had mostly been political in nature, avoiding large upswings in the months immediately following an election.
The increase went into effect with the 2021 city budget, and became automatic in 2022.
While the increase in taxes is capped at 5% annually, the CPI has soared by more than 9% because of explosive inflation in the United States’ economy. That 9.1% increase in the CPI is the largest in a one-year span since Nov. 1981, according to the U.S. Bureau of Labor.
When asked whether she regretted the decision to tie property taxes to the CPI, Lightfoot said that it was impossible to predict the type of inflation that the U.S. is currently seeing.
“(Like with) anything else I do, I don’t have any regrets, but obviously nobody anticipated that the CPI was going to explode like it has this year,” she said. “Nobody could have anticipated what the consequences of inflation that we’re seeing here this year.”
Lightfoot said that her administration plans to discuss different strategies with members of the City Council while budget negotiations continue.
“We’ll make sure that we take the necessary steps to put some guardrails around the CPI going into next year’s budget,” she said.
According to an analysis performed by the Chicago Tribune, a maximum 5% tax increase would put an additional $85.5 million into city coffers, but it remains unclear whether the City Council will vote to authorize the increase, an important question with the election looming early in 2023.
Ald. Tom Tunney, who represents Chicago’s 44th Ward, hinted that Lightfoot may have a difficult time getting support for her budget if she pushes for the full increase.
“She will have a difficult time,” he told the Tribune. “This was to be the year of the easy budget vote.”