2016 brings tax hikes for Chicago, Cook County, city schools
Thursday, December 31, 2015
by Hal Dardick
Even by Illinois standards, where city, state, county and mass transit officials have become increasingly less hesitant to raise taxes and fees in recent years, 2016 will be financially painful.
The biggest hits come in the form of higher City Hall and Chicago Public Schools property taxes, as well as a penny-on-the-dollar sales tax increase throughout Cook County. But people who use taxis and ride-share services in the city, stream Netflix shows in Chicago or ride Metra trains also will be forced to dig deeper.
Here's a look at how it will shake out (of your wallet):
Last fall, Mayor Rahm Emanuel proposed — and the City Council approved — a 2016 budget with $755 million in tax and fee increases, including the largest property tax hike in modern Chicago history to cover contributions to pension funds for police officers and firefighters.
Although the property tax increase will come in stages over four years, the biggest boost — $319 million — is on tap for this year. That could increase the tax tab on a $250,000 home by nearly $300, and by about $1,670 on a $500,000 business property.
Those increases will vary depending on new assessed property values calculated this year. In upscale or booming areas, taxes will go up by greater amounts. In less affluent areas, they will increase less.
The mayor, meanwhile, is backing legislation in Springfield that would try to eliminate property tax increases for homes of $250,000 or less while increasing taxes on businesses — but so far that plan has gone nowhere.
Folks will have a while to prepare to cover the extra property taxes — the increases will show up on the second installment of bills, typically due in August.
Owners of single-family homes, duplexes, three-flats and four-flats in Chicago also will pay a new garbage hauling fee of $9.50 a month — which comes to $114 a year per unit — that will show up on water bills sent out every other month. Senior citizens will pay half that much.
There also is a taxi fare increase of about 15 percent that goes into effect Friday. Ride share fees will go up by 20 cents a trip, a fee that will go up during surge-pricing periods, starting with the new year. And a $5 fee had already been tacked onto ride share pickups and drop-offs at the city's two airports, the McCormick Place convention center and Navy Pier.
People who stream Netflix and other entertainment services will have to pay the city's 9 percent amusement tax, and businesses will have to pay a 5.25 percent tax on cloud-based computer services. Businesses with less than $25 million in revenue that have been operating for less than three years will be exempt from that tax.
Other city increases: new taxes on electronic cigarettes and the liquids that fuel them; an increase in the vehicle boot removal fee to $100 from $60; and a $400 increase, to $500, in the maximum fine for businesses that do not shovel snow in the public way.
Last summer, Cook County Board President Toni Preckwinkle proposed — and the County Board narrowly approved — a penny-on-the-dollar sales tax increase, with most of the new $474 million a year headed to county worker pension funds. That kicks in Friday and will return Chicago to a 10.25 percent sales tax rate — the highest big-city rate in the nation.
In addition, as part of the new county budget, there's a new 1 percent charge on hotel stays, which will push the total hotel tax in Chicago up to 17.4 percent. That goes into effect May 1.
Commissioners also approved a $20 increase in lawsuit filing fees for Circuit Court Clerk Dorothy Brown to upgrade document storage and automation that was effective Dec. 1; a tax of 1 to 5 cents on each bullet sold that goes into effect June 1; and a small tax on electronic cigarette liquids that takes effect May 1.
Chicago Public Schools
Owners of Chicago homes and businesses will see two increases in their CPS property taxes this year. One, approved by both the CPS board and City Council, will raise $45 million a year for school building projects, and another $19 million tax hike approved by the CPS board will help CPS cover direct education costs.
Like the City Hall property tax hike, the CPS taxes will show up on the second installment due in August. Together they cost the owner of a $250,000 home about $51, and the owner of a $500,000 business about $335.
The commuter rail agency that serves tens of thousands of people a day who travel into the city for work is raising its fares Feb. 1. People who buy monthly passes will see a $2.50 increase. Ten-ride tickets will increase by $1.75, and single trip tickets will go up by a quarter. Base prices vary depending on the distance traveled.
Illinois State Toll Highway Authority
Passenger vehicles using Illinois toll roads won't be hit with an increase next year, but truckers will start paying 10 percent more Jan. 1 as part of a continuing multiyear phase-in of increased trucker tolls.
With the Democratic legislature and Republican governor headed into the seventh month of deadlock over a state budget, there are no major tax or fee increases on the books yet, but a few fines and fees are going up.
People who top speed limits by 26 mph or more in construction areas or near schools will be hit with misdemeanor criminal charges, which carry fines of up to $2,500 and even the potential for a jail term of up to one year.
A new $75 fine for parking a nonelectric car in a space reserved for those vehicles will go into effect Jan. 1. The maximum civil penalty for not complying with orders from the Department of Natural Resources to address permit violations near waterways will increase to $5,000 from $1,000.
And a new procedure to expedite getting a driver's license or state ID comes with a $75 price tag.
Despite the massive property tax increase, the city still could find itself about $220 million short of what is needed to make required payments to police and fire pension funds if an Emanuel-backed bill with a slower phase-in of pension payments is not signed by Gov. Bruce Rauner.
Although the governor has expressed general support, Democratic legislators have not sent it to Rauner for fear he'll veto it to keep up pressure for the pro-business, union-weakening agenda he wants enacted as part of a budget agreement. City Budget Director Alexandra Holt has said that failure to enact the bill could lead to further tax city tax increases.
And it's possible the state ultimately will increase taxes in some fashion, with both Democrats and Rauner agreeing that new revenue could be part of new spending plan, if and when the General Assembly and governor come to terms on a budget. It's an election year, however, and passing a tax hike could prove difficult.
Chicago Tribune's Monique Garcia contributed from Springfield.