Mayor Lori Lightfoot plans to ask state lawmakers to help Chicago dig out of a $1 billion hole — by empowering the city to tax high-end professional services and raise the transfer tax on big-ticket home sales, City Hall sources said Monday.
The vacationing mayor plans to make those requests during a fall veto session, when she also will seek a Chicago-only casino gambling fix.
An Illinois Gaming Board consultant concluded last week that the tax and fee structure imposed by the General Assembly last spring is so “onerous,” not even a Chicago casino located in or near downtown could attract financing.
Lightfoot wants that corrected.
At the same time, sources said Lightfoot wants state authorization to tax high-end professional services and raise the real estate transfer tax on the sale of $1 million-plus homes. The mayor once earmarked that tax for homeless services and affordable housing.
Sources said the mayor is prepared to portray those two local taxes as the only alternative to a dreaded property tax increase she wants desperately to avoid after former Mayor Rahm Emanuel doubled the city’s levy.
John Patterson, a spokesman for Illinois Senate President John Cullerton (D-Chicago), said the veto session is still two months away and it’s “premature to start speculating” on Chicago’s needs.
Patterson would say only that the Senate president is “eager to work with” Lightfoot and has “always tried to be helpful” to the city — but, he added: “These issues would be a heavy lift in Springfield.”
Illinois House Majority Leader Greg Harris (D-Chicago) agreed.
“It’s always a big lift for the Legislature to pass things in veto session. It’s a short period of time. And if they’re big requests, that’s gonna mean a lot of advance work and a lot of prep to get things done,” Harris said Monday.
“We’re just gonna have to work through it and build the political support.”
Harris denied a request as ambitious as Lightfoot’s would inevitably be portrayed as a Chicago bailout.
“What this is viewed as would be the city coming down to ask for the right to solve its own problems,” Harris said.
“We’ll all have to work together because keeping the city of Chicago vibrant is key to keeping the economy of the state of Illinois vibrant and keeping our tax revenues flowing in, since so much of it comes out the city of Chicago. But it’s gonna take some work.”
Lightfoot laid at least some of the groundwork last week, making her second trip to Springfield for festivities that preceded Democrats Day at the State Fair, Harris said.
“A lot of my fellow members have noticed. The mayor wants to build a relationship with all members of the legislature. She’s introducing herself. She’s coming down to Springfield to make sure that her presence is known and felt. She’s aware of our importance in helping her and the city help themselves,” Harris said.
House Minority Leader Jim Durkin (R-Western Springs) said he’s “open to talking with the mayor to discuss ways to help her with her pensions and other fiscal issues that she has.”
But, he said: “I just don’t see my caucus embracing either of those two concepts...Our caucus believes that we’ve placed enough taxes and fees upon homeowners and businesses large and small throughout the state.”
With Democratic super-majorities in both houses, “both chambers can do this on their own,” Durkin noted.
In 2011, Rahm Emanuel campaigned on a promise to extend the sales-tax umbrella to professional services.
Then-mayoral candidate Gery Chico branded it the “Rahm tax,” prompting Emanuel to drop the idea.
One week before her landslide victory, Lightfoot suggested taxing “high-end” legal and accounting services to satisfy a looming $1 billion spike in pension payments.
“We can’t keep balancing the budget on the backs of low-wage and working-class folks. We’ve got to make sure that people of means absolutely pay their fair share,” she said then.
At the time, Lightfoot ruled out setting her sights on lower-end services such as hairdressers, nail salons and health club memberships. She reiterated that promise in July.
“We are not going to propose any tax that’s gonna be regressive and that’s gonna fall on the backs of those who are least able to manage that burden,” she said then.
Kristen Cabanban, a spokesperson for the city’s Office of Budget and Management, had no immediate comment on the mayor’s impending request.
