Chicago Approves Record Tax Hike

Published February 1, 2008

The Chicago City Council has approved the biggest property tax hike in the city’s history, plus higher taxes and fees on a host of other items.

City officials project the additional tax take will total nearly $280 million in a city budget of $5.9 billion.

Councilmen approved the tax hikes in November, but not without giving Mayor Richard M. Daley (D) the biggest budget fight of his 18-year tenure as Chicago’s mayor. The vote for the $86 million property tax hike was 29-21. The vote for the rest of the tax-hike package was 40-10.

Litany of Tax Targets

Other items to see tax or fee hikes include liquor, telephone service, natural gas, car leases, DVD rentals, and city vehicle stickers. The tax package also includes a new tax of five cents on each bottle of bottled water sold in the city.

Daley vigorously defended his calls for higher taxes and was visibly angry during the debate and afterward. He described as “hypocrisy” votes by council members who supported the budget but opposed the tax hikes to fund it.

“No one wanted to make the tough decisions” on what to cut to keep from raising taxes, Daley said. “But it was the easy decision to vote ‘no'” on the tax and fee hikes.

Scandals Undermine Confidence

Corruption was a theme of some aldermen who opposed the tax hikes. The Daley administration has been stung by dozens of indictments and criminal convictions of city workers and officials in recent years, and criminal investigations are continuing.

“Nothing has eroded public confidence in our local government more than the constant drumbeat of criminal indictments and convictions of people who have enriched themselves at public expense,” said Alderman Joe Moore (D-49th Ward), who opposed both the budget and the tax hikes, during the floor debate. “And nothing has made the public more cynical than the endless string of broken promises to end business as usual in city government.”

In a final shot at the tax hikes, Moore added, “How many bottles of water must be sold to pay for the $12 million fund created to compensate victims of the city’s rigged hiring system?”–referring to a lawsuit settlement the city is still paying for years of corrupt hiring practices that favored politically connected persons for jobs and promotions.

Three weeks after Moore made those comments, the city announced an agreement to pay nearly $20 million to four men who sued the city after they were allegedly tortured into falsely confessing to murder by Jon Burge while he was a Chicago Police Commander. The four men were later sentenced to death but released after evidence cleared them of the crimes. The settlement comes on top of $18 million the city has already spent on legal fees and other expenses defending the case.

Dozens of other suspects also have accused Burge and his underlings of torture, and other lawsuits remain open. Burge was fired in 1993 after special prosecutors concluded he and other officers under his command routinely tortured suspects in the 1970s and 1980s.

Steve Stanek ([email protected]) is managing editor of Budget & Tax News and research fellow at The Heartland Institute.