Chicago Faces Tough Budget Choices: Civic Federation Urges Alternatives to Property Tax Hikes

Mayor Johnson weighs revenue options as $1B deficit looms for City

Photo byDillon KyddonUnsplash

CHICAGO – As Mayor Brandon Johnson prepares to unveil his budget plan in just two weeks, the Civic Federation, a key fiscal watchdog, is urging the city to avoid raising property taxes, if possible, in its effort to close a nearly $1 billion budget shortfall. With residents already feeling the pinch from rising property values, the group insists the city needs to consider other solutions before asking homeowners to pay more.

Joe Ferguson, president of the Civic Federation, emphasized the potential impact on Chicago's property owners, particularly given the current commercial real estate market struggles. “We're in the middle of a triennial reassessment during a time when commercial real estate values are suppressed, which means residential property taxes will be going up as a consequence of that,” Ferguson said. He added that with Chicago Public Schools (CPS) likely to seek its own property tax increase due to its financial crisis, the city should avoid further burdening homeowners.

Despite these concerns, Mayor Johnson has not ruled out a property tax hike. In an interview with ABC7’s Mark Rivera, the mayor acknowledged the difficult decisions ahead. "Whatever we do, we have to ensure that the services the people of Chicago rely on remain intact," Johnson said, hinting that a tax increase may be necessary to maintain essential city services.

However, the Civic Federation’s report outlined several other revenue-generating measures that could help ease the financial strain without immediately resorting to property tax increases. These options include raising the city’s liquor tax, implementing a 1% grocery tax, adding video gaming to generate revenue, or increasing garbage collection fees.

Not all of the Civic Federation’s suggestions were well-received. Alderman Jason Ervin, chair of the mayor’s budget committee, pushed back against the idea of raising garbage collection fees. “The garbage tax charges the lady on a fixed income the same as a millionaire. I don’t think that’s fair,” Ervin said, signaling that some of these revenue options may face strong opposition within the City Council.

Before turning to revenue hikes, the Civic Federation is urging the city to first look at ways to cut costs. Their recommendations include implementing furloughs for city employees and eliminating more than 2,500 vacant positions that remain unfilled year after year. These vacancies, Ferguson pointed out, could be a significant area for savings, but cutting them may require political capital that the mayor appears hesitant to spend. “It begs the question: why are these positions still there if they aren’t being filled? Cutting vacancies tends to involve the use of political capital, which the mayor seems reluctant to expend,” Ferguson remarked.

Mayor Johnson, on the other hand, expressed his reluctance to implement cuts or layoffs, stating, “I don’t want cuts, I don’t want layoffs,” reflecting the difficult balance between preserving city services and addressing the financial deficit.

The Civic Federation’s report serves as a potential roadmap for both the mayor and the City Council as they prepare to confront Chicago’s budget crisis. The fiscal watchdog group hopes the recommendations will help guide city leaders toward making informed decisions about how to balance the budget without overly burdening taxpayers.

As the clock ticks down on Mayor Johnson’s upcoming budget proposal, the city faces a complex challenge: balancing the needs of residents, maintaining essential services, and managing a staggering deficit—without resorting to property tax hikes that could further strain already struggling homeowners.