What’s missing from Daley’s property tax freeze pledge

Bill Daley, the son of one former Chicago mayor and brother of another, is running for mayor in his own right with a pledge in his first TV campaign ad that suggests he’s following the family playbook.

In the ad, a narrator promises: "Bill will put a moratorium on tax hikes to keep families in their homes" as the words "PROPERTY TAX FREEZE" appear on the screen.

Daley’s mayoral kin, Richard J. and Richard M., often made similar sounding claims in unveiling annual city budgets. Outgoing Mayor Rahm Emanuel has sometimes done the same.

But what the Daley ad fails to make clear is that he is only promising to freeze a portion of the various property tax levies that make up a typical bill, not the whole thing.

First, it’s important to understand how property tax bills break down.

In Chicago, there are levies that fund city government and separate levies that fund schools, parks, Cook County government, the Metropolitan Water Reclamation District and a handful of other public agencies.

Last year, only about 25 percent of a typical Chicago property tax bill covered city government, according to the Cook County Clerk’s office. So holding the line on the city’s levy, as Daley proposes in his ad, might slow the growth of tax bills for property owners in the city but it wouldn’t contain them.

By contrast, school taxes comprised more than half of Chicago tax bills in 2017. If elected mayor, Bill Daley would gain the power to appoint the Board of Education and top schools officials and effectively control the city’s education apparatus. The same goes for the Chicago Park District, whose levy made up about 5 percent of the typical bill in 2017.

We asked Daley spokesman Peter Cunningham whether the candidate’s freeze pledge extended to those sister city agencies under a mayor’s thumb. Cunningham, in an email, said it did not, though he stressed Daley "will very aggressively push other taxing bodies to be efficient and to look for alternatives including new state funding — especially for schools."

Cunningham served as a spokesman for the Chicago Public Schools when Daley’s brother, Richard M. Daley, was mayor. Property tax levies at CPS have annually risen even when city government holds the line.

That isn’t to say it would be politically or fiscally prudent to freeze the schools’ portion of the property tax. The district faces chronic financial woes, and often finds it hard to make ends meet even after raising its annual property tax levy to the amount allowed under state law.

It does suggest, however, that Daley’s ad skates around critical nuance of how property tax bills in Chicago are calculated.

Proposals like Daley’s also leave out the other big question raised by the possibility of a property tax freeze: how else to come up with revenue to cover spiraling projected costs, particularly for pensions.

Past mayors have managed to keep property taxes flat by employing a number of fiscal sleights of hand, including underfunding pensions.

What was once a much smaller problem for the city’s bottom line has "snowballed" over the years, said Amanda Kass, associate director of the Government Finance Research Center at the University of Illinois-Chicago, forcing the city to make much more significant increases in order to catch up.

Kass said this practice has also led Chicago residents to expect the current level of services the city provides without an increase in property taxes.

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"Residents weren’t feeling the full cost of services because the pensions were being underfunded," she said.

Richard M. Daley also staved off property tax increases by spending proceeds from a controversial $1 billion long-term lease of the city’s parking meters to private investors.

The tradeoff in signing away decades of meter revenue was said to be the ability to invest and grow the lease proceeds for future city needs. By late 2010, his last full year in office, Richard Daley had spent almost all of the proceeds.

Bill Daley’s TV ad promises he would, as mayor, "put a moratorium on tax hikes to keep families in their homes."

That claim is misleading. A spokesman for his campaign told us his freeze would apply only to taxes that directly fund city government. The promise does not extend to property taxes levied for schools, parks and other sister city agencies the mayor effectively controls though they comprise well over half of a typical bill.

So Daley is promising to freeze the city’s direct property tax levy — but not all of the city-level property taxes Chicago homeowners pay.

We rate Daley’s statement Half True.

HALF TRUE – The statement is partially accurate but leaves out important details or takes things out of context.

Click here for more on the six PolitiFact ratings and how we select facts to check.