Taxes and cuts suggested in Chicago finance activity power report

Chicago ought to resume annual inflation-based changes to its property tax levy.

That is one suggestion from a activity power Mayor Brandon Johnson assembled and charged with developing with methods to strengthen Chicago’s long-term monetary well being.

It would not name for different main property tax hikes, however the report, ready on Aug. 31 and launched this week, additionally raises the potential for re-amortizing and decreasing pension debt, together with by the issuance of pension obligation bonds.

The duty power is co-chaired by Loop Capital founder, chairman and CEO Jim Reynolds and the incoming Chicago City League president and CEO Karen Freeman-Wilson, who’s the present mayor of Gary, Indiana. 

“The suggestions for the FY2026 finances characterize a balanced strategy to our cost,” the co-chairs wrote within the report’s introductory letter to Johnson. “They embrace each revenue-generating measures and cost-saving choices, recognizing {that a} mixture of methods is crucial to addressing the town’s finances deficit.”

On Could 31, 2026, the duty power will launch a extra complete, long-term report. It would deal with financial growth and “a variety of advanced and interconnected fiscal points,” in line with the interim report.

The duty power’s interim report places forth a mixture of efficiencies and income options within the $1 billion to $2.1 billion vary to shut the town’s $1.15 billion finances hole.

The group recognized between $630 million and $1.65 billion in potential revenue-related alternatives, and between $372.4 million and $455.5 million in efficiencies.

As a part of the efficiencies, the duty power really useful extending the supplemental pension funds coverage past 2028; re-amortizing and decreasing pension debt by pension obligation bonds and pension buyouts; and shifting the timing of pension contributions.

The effectivity suggestions included a emptiness freeze; re-examining worker healthcare plan designs and exploring pharmacy profit supervisor choices; disbanding the Chicago Police Division’s horse-mounted unit; diverting 911 calls to the Chicago Hearth Division to a hospital-based telehealth service; rising the usage of autonomous drones by the CPD; and implementing an early warning system to flag cops with problematic habits patterns.

The duty power additionally really useful a redundant expertise expenditure evaluation and elevated use of synthetic intelligence. 

On the income facet, the duty power referred to as for the town to declare the utmost tax increment financing surplus attainable, enable the pure expiration of some TIFs and discover early termination of different TIFs. 

The group recommended the town maintain the grocery tax, which is able to expire Oct. 1 if Chicago takes no motion, and that it enhance its share of the native authorities distributive fund.

And it really useful Chicago reinstitute the employer’s head tax, move an web gaming tax and pursue a funds in lieu of taxes program.

Different suggestions included a rideshare congestion surcharge hike; an elevated rubbish price; retail supply charges; a street utilization cost; adjusted parking charges; and indexing charges and fines to annual inflation.

On the disputed Municipal Staff’ Annuity and Profit Fund cost, which Chicago Public Faculties refused to make, it recommended the town attain an settlement with the college district — and that “the state ought to facilitate the making of that cost” and make any needed legislative adjustments.

“Addressing the structural deficit would require time, political will, and the braveness to embrace measures that could be tough for a lot of within the quick time period,” the co-chairs wrote. “But we firmly consider, as our collective expertise affirms, that short-term sacrifice is usually essential to safe long-term stability and progress.”

Town’s finance group didn’t reply to questions by press time.