This Week in Springfield the Illinois General Assembly convened Tuesday to appoint Representative Frank Mautino (D- Spring Valley) as the next Illinois Auditor General and consider in committee a legislative proposal to shift more of Mayor Emanuel’s property tax increase onto employers.
Emanuel’s Property Tax Hike
Mayor Rahm Emanual’s 2016 budget is predicated on a $540 million property tax increase allegedly to pay the City’s substantial pension payments. In order to try and quell a potential revolt by residential tax payors, the Mayor has proposed doubling the homestead exemption from the current $7,000 to $14,000. The result of this expansion would be to shift even more of the property tax burden in Cook County onto the backs of employers who already pay 2.5 times more than residential property owners. The Mayor’s theory is that employers can afford the increase.
“The lion’s share of the increase will be borne by our thriving central business district and commercial areas,” said Deputy Mayor Steven Koch. “We’ve heard the feedback from our residents on everyone paying their fair share, and believe that this proposal does just that.”
The Mayor’s proposal requires the approval of the Assembly and Governor. This week, the House Revenue and Finance Committee voted, on a partisan roll-call, to send the proposal to the floor of the House for further consideration. During the hearing, IRMA and a coalition of business groups including the Chicagoland Chamber and the Building Owners and Managers Association, made it clear that this plan would place an unjust burden on businesses and residential renters. Although the plan purports to protect residents from a tax increase, realistically the majority of residents in Chicago will see increased cost as a result of the tax increase. For instance, approximately 56% of people who live in Chicago live in apartment buildings. The vice president of the Building Owners and Managers Association (BOMA) testified that building managers would have to pass on the increased property taxes to tenants and would make cuts in maintenance and other tenant services. Additionally, BOMA said the mayor’s plan would add roughly $24,000 in annual costs to the average small or mid-sized business downtown, because landlords would pass on the tax increase to their business tenants.
IRMA and the Chicagoland Chamber testified that businesses in Chicago are currently paying two more times in property tax than their residential counterparts under Chicago’s unique and archaic classification system. As such, the proposed plan would increase this burden even more. Additionally, it was pointed out that the business climate in Chicago is already burdened with other oppressive initiatives that include but are not limited to a Chicago only minimum wage, an increased sales tax, and consideration of paid sick leave, vacation pay, and scheduling mandates. Moreover, the additional property tax will further exacerbate the lack of business development in food deserts and other blighted areas.
Not surprisingly, over the last four years the Illinois Department of Revenue statistics show the number of businesses within Chicago has decreased 1.59% while the collar counties have seen businesses increase within their borders by up to 9%. These same statistics show that ten years ago 11,000 more businesses resided and paid taxes in Chicago and twenty years ago 26,000 more businesses resided and paid taxes in Chicago. The business community is concerned that this property tax increase will continue this dangerous trend.
While the Mayor’s office points to the ‘thriving’ downtown area of Chicago, it ignores the savage impact this tremendous property tax shift will have on employers in the neighborhoods outside the central business district. The Mayor’s proposal ensures already undeveloped and under-developed neighborhoods will stay that way.
Representative Frank Mautino Named Illinois Auditor General
The House and the Senate appointed Representative Frank Mautino to replace retiring Illinois Auditor General Bill Holland. Representative Mautino has served in the legislature since 1991 when he replaced his father Richard Mautino who was first elected to the House in 1974. He represents the 76th District which includes Spring Valley, Hennepin, Oglesby, Ottawa, LaSalle, Streator and Peru. He serves as the chair of the House Democratic Downstate Caucus and also as the Deputy Majority Leader. More importantly, Representative Mautino is a husband and father of three children.
During his tenure, Representative Mautino earned the respect of his peers on both sides of the aisle, in both Chambers and from many Illinois industries. His opinion is widely sought after due to his fair and reasonable approach to any discussion, topic or negotiation. As a result of this respect, Representative Mautino facilitated bipartisan legislation across a plethora of issues including but not limited to liquor, labor, tax, workers’ compensation, unemployment insurance, healthcare, etc. The Illinois General Assembly will lose a great representative and an exemplary individual but those characteristics will serve him well as Auditor General.
IRMA would to thank Representative Mautino not only for his tireless representation of his constituents but for his consistent support of Illinois retailers. We wish him every success in his new role.