Gasoline tax, property tax, ticket hikes and fees are part of Lightfoot’s budget

Chicago Mayor Lori Lightfoot is trying to increase her income to close large income gaps in part due to the COVID-19 pandemic.

Chicago’s latest budget revolves around more taxes and fees to generate income, even as residents struggle with lost income and COVID-19 restrictions continue to hurt businesses.

Mayor Lori Lightfoot $ 12.8 billion budget calls for property tax hikes, more tax increases and more fees to avoid layoffs. Chicago City Council passed the budget by 29 to 21 votes.

He was accompanied by 41 votes to 8 to incur additional debt, including $ 1.4 billion to cover the first two years of a five-year capital plan of $ 3.7 billion and $ 1.7 billion of debt refinancing to help close the operating deficit.

The part of Lightfoot’s budget that will hit Chicagoans hardest is a $ 94 million property tax hike. Residents with a median home value of $ 250,000 will pay an additional $ 56. However, it is now expected that property taxes will automatically increase each year based on the consumer price index.

The budget also includes a gasoline tax hike of 3 cents, bringing the city’s total gasoline tax to 8 cents. According to an Illinois Policy Institute study, on an average of 2.53 gallons of gasoline, $ 0.91, or 36%, of the price is just taxes and fees.

A new tax will also be levied on rentals of cloud-based computers.

Fee increases are also a significant portion of budget revenue, with Lightfoot aiming to generate $ 38 million from additional fees.

This includes the use of controversial traffic cameras to antagonize drivers exceeding the speed limit of 6 to 9 mph. A driver’s first violation generates a warning, but a second violation results in a fine of $ 35, as do all 10 mph violations. Tickets cost $ 100 for a speeding ticket of 11 mph or more.

Lightfoot also plans to install more parking meters and increase the security ticket, such as illegal parking. Earlier this year, more than 35,000 parking tickets were distributed in Chicago even after Lightfoot said residents would get a break with so many people losing income due to COVID-19-related layoffs.

Lightfoot’s budget put residents on the hook for $ 1.7 billion of the city’s debt as well. The mayor uses a financial tactic called “pick up and throwWhich means the city borrows more than it needs after refinancing existing debt, but defers payments on new debt further into the future. The tactic leaves other officials footing the tab and is an old practice that former mayor Rahm Emanuel put an end to.

The layoffs were originally part of Lightfoot’s plan to save money. However, she now goes borrow an additional $ 15 million sales taxes on marijuana. This is part of a deal with the Chicago Federation of Labor to avoid laying off 350 union employees, which was originally the mayor’s plan. Most non-union employees earning $ 100,000 or more will still need to take five days of unpaid leave in 2021. Over 1,900 positions currently vacant not to be filled.

The real problem stifling Chicago’s budget is pensions. Instead of trying to fix this, Lightfoot’s budget is further strangling taxpayers at a time when they can least afford it.

In 2021, pensions are expected to absorb 14.2% of the city’s budget. Starting in 2022, these contributions will be actuarially determined, which means that investment losses will lead to increased costs for taxpayers. This means pensions could become an even bigger part of the city’s budget, in part because of losses from COVID-19.

Light foot called on state lawmakers pursuing meaningful pension reform to help her city cope with this worsening problem, but did not specify what reforms it wanted to see or call for a constitutional amendment. Changing the constitution is the only way Illinois can truly ease the growing burden of municipal pensions.

Chicago’s first-term mayor is expected to support an amendment to the state’s constitution, as is former Mayor Emanuel, which would make changes to future unearned benefits to create a more sustainable system. State lawmakers should also champion the same remedy for their growing budget problems.

Esther L. Steinbach

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