(The Center Square) – Chicago business owners are now being forced to pay some of the highest commercial property taxes in the country at more than 4% of their properties value, or more than double the national average of 1.81%.
The sobering numbers are highlighted in a new Lincoln Institute of Land Policy study that also outlines how the rising rates are taking a toll on the city across the board, including leading to fewer overall businesses and growing inequalities in various communities.
Illinois Policy Institute’s Dylan Sharkey is among those taking notice.
“Chicago has incredibly high commercial property taxes even compared to other big cities and pensions are one of the biggest reasons,” Sharkey told The Center Square. “This puts the city one big step closer to insolvency, to bankruptcy, and the state is going to be on the hook for that if that day ever comes.”
While some worry the persistent struggle could leave the city in the same place as Detroit when that city became insolvent, Sharkey said the situation here at home is much worse.
“When Detroit went bankrupt, Michigan as a state wasn’t broke,” he said. “Illinois as a state is broke. It’s like a father and son going bankrupt together. The head of the household in Michigan was able to help out with the money. Illinois doesn’t have that type of money to give out because the state is also broke.”
As the city’s struggles have lingered, Sharkey said he wouldn’t be surprised to see Chicago Mayor Brandon Johnson resort to pushing a measure similar to the $300 million property tax hike he introduced last year as part of the city’s budget before it was unanimously rejected by the Chicago City Council.
“It was the first time ever where you had all 50 council members voting no on something from the Mayor for property tax hikes,” he said. “I wouldn’t be surprised if he tries something like that again, given this new $11 billion in pension debt and Chicago’s budget shortfall.”
Gov. J.B. Pritzker recently signed legislation enhancing the pensions for Tier II police and firefighters in Chicago, a move Johnson said was “incomplete” without more tax dollars going to the city.