Mayor Lightfoot’s ‘Plan B’ budget includes a property tax hike and spending cuts

With Mayor Lori Lightfoot’s real estate transfer tax on thin ice, a “Plan B” option to help close the city’s $838 million budget deficit—one that includes more property taxes—is becoming a likelier option.

Lightfoot left Springfield on Tuesday without approval for her proposed $50 million hike in the real-estate transfer tax.

The alternative to the progressive tax is mostly a package of spending cuts: A city hiring slowdown expected to save $20 million, a $2 million cut to the Fire Department’s overtime budget, $6 million in health care cost savings, and $1.2 million saved by reducing the number of new jobs created by Lightfoot’s office. The revised budget also claims that another $10 to $15 million will be saved by refinancing $1.3 billion of city debt because of changes in interest rates.

On Tuesday, Chief Financial Officer Jennie Huang Bennett admitted that the year-to-year property tax levy increase would also add up to $65 million—not the $18 million originally floated by Lightfoot’s budget to keep public libraries open on Sunday. Bennett explained that $32 million had already been passed by the previous City Council to pay for a capital works bond issue and that $15 million was a bump caused by new construction.

“The levy amount will go up by $65 million. That is an accurate statement. But, it’s part of the increase that has gone on for years,” said Bennett, according to the Sun-Times.

Lightfoot said she hasn’t given up hope on her plan to charge higher tax rates on real estate transfers—including a 2.55 percent rate for sales over $3 million—but time is short in the legislature’s three-day veto session before they adjourn for the year.

Meanwhile, Wednesday’s Chicago City Council meeting will include a public hearing on the proposed 2020 city budget.