Pot sales in Illinois recently surpassed $100 million, and gaming experts estimate a casino could generate $6.6 billion per year. All this new revenue would help lead Illinois and Chicago back to fiscal stability.
1-Dec-20 For property owners in Chicagos wealthy neighborhoods from the Gold Coast and Old Town to Lincoln Park and Lakeview the outlook for future hefty real estate tax increases appears to be etched in stone.
Mayor Lori Lightfoots 2021 pandemic budget will include a $93.9 million property tax hike as part of a $1.6 billion real estate tax levy. The increase was approved by a tight 28-22 City Council vote, with aldermen representing more affluent neighborhoods opposing the unpopular measure.
Lightfoots revenue plan also relies on a three-cent gas tax hike, and aggressively issuing $35 tickets to drivers caught zooming past speed cameras at just 6-10 miles an hour over the limit.
In addition, the plan calls for restructuring $1.7 billion worth of city debt for the second time. The refinance will save $501 million of interest payments alone in 2021 to help defray an unprecedented $1.2 billion budget shortfall.
The real estate tax hike also includes $34 million linked to a rise in the consumer price index. However, the ordinance additionally requires property owners to be doomed to either an annual property tax increase of five percent or an increase based on the consumer price index, whichever is less. The Lightfoot administration has assured the annual increases will be approved by the City Council every year.
Lightfoot has argued the modest 1.3 percent real estate tax increase to homeowners is necessary. A bungalow owner with a property valued at $250,000 will see a tax bill increase of $56. But more expensive homes could see increases of hundreds of dollars.
2nd Ward Alderman Brian Hopkins, who represents the Near North and Northwest Sides, including the affluent Gold Coast, voted against the tax hike, saying he could not increase taxes on residents during the pandemic.
They want us to fight against property taxes, said Hopkins (right). They want to know that if were going to ask them to pay more every year that weve exhausted all other possible options. We have not done that.
Meanwhile, progressive Cook County Assessor Fritz Kaegi currently is sending COVID-19 assessment adjustment letters to thousands of Chicago property owners, noting that the pandemic has caused a significant economic downturn and lower property values, depending on the propertys type and location.
Lightfoots budget plan also offered concessions that avoided laying off more than 350 city workers. Now, the city will borrow $15 million against the tax revenues of future cannabis sales, although the borrowing could be averted if a new round of federal stimulus funds happens under the Biden Administration.
Marijuana is a pot of gold for Chicago
If there is a relatively new pot of revenue gold to tap, it likely is cannabis. The pot business in Illinois recently surpassed the $100 million threshold in total sales for the first time.
In addition to recreational sales, medical marijuana sales recently topped $33 million, reported the Illinois Department of Financial and Professional Regulation, which licenses marijuana dispensaries in the state.
Recreational marijuana sales generated a record $75 million across the state during October, up nearly $8 million from the previous month.
Wheres the casino?
A future revenue stream Lightfoot should pursue is the source of another sin tax, the launch of an immense Chicago gambling casino.
Lightfoot recently asked casino operators and real estate developers to submit plans on how they would build and run the casino. The request came after lawmakers in Springfield changed the casino tax structure and passed a pile of chips to the gaming industry.
The cash-strapped mayor also should launch a temporary casino while a permanent one is under construction.
The obvious downtown location should be Lakeside Center (right) the original McCormick Place East which could raise millions in gaming tax dollars for the city as early as 2021.
Construction sources say the building originally was designed and wired decades ago for a future casino and there is plenty of nearby parking. Earlier this year, some $15 million in upgrades were pumped into Lakeside Center to convert it to an emergency hospital for up to 2,500 COVID-19 patients.
Gaming experts have estimated the casino would generate up to $6.6 billion in annual revenue, with direct tax revenue of $3 billion to $4 billion to the city and state. All this new revenue would help lead Illinois and Chicago back to fiscal stability.
Experts say a ready-to-open-now downtown gaming palace would rapidly kick-start lost convention and tourist business that was killed by the COVID-19 pandemic.
Once the virus crisis is cured with new vaccines, spin-off revenue from the casino could flow to the nearly bankrupt hotels, restaurants, museums, and boarded-up Michigan Avenue shops.