Chicago, state lawmakers consider tax hikes

CHICAGO (WLS) -- Chicago homeowners could face up to a 30 percent hike in their property taxes to pay for the city's financial problems.

Not only is that much of a city property tax increase possible, there are efforts under way on the state and county levels to raise income and sales taxes, all because politicians are running out of options to pay their public worker pension debt.

"We are willing to do things to write the wrongs that have been committed over the years," Chicago Mayor Rahm Emanuel said on July 1.

When Mayor Emanuel suggested a $200 million property tax increase to help pay teacher pensions, he did not mention the additional increases that might be needed to pay city worker and police and firefighter retirement benefits.

Exactly one week earlier, Cook County President Toni Preckwinkle proposed raising the county sales tax by one full cent on the dollar.

"If we don't deal with our pension crisis now, we're just creating more problems down the road," Preckwinkle said.

Meanwhile, in Springfield, Governor Bruce Rauner suggested during his campaign that the state expand sales tax to include services. Right now Democratic lawmakers led by House Speaker Michael Madigan want to restore most if not all of the state income tax that was rolled back to 3.75 percent in January 2014.

Matt Paprocki of the Free Market Illinois Policy Institute argues that Chicago and the rest of the state are overtaxed and that there's more than enough revenue for the politicians to run their governments

"I think that residents are concerned with how they're spending this money," Paprocki said.

But labor attorney Tom Geoghegan says the state needs to generate more revenue and should do so with a progressive income tax.

"You can tax the people who can afford to pay at a higher level," Geoghegan said.

And Geoghegan says low-tax Chicago is losing population because people move to higher tax cities and suburbs where public services are better:

"By keeping property taxes low we're emptying out the city," Geoghegan said. "Middle class people will go. The poor who don't have assets and money will stay and the schools will get worse and worse."