The City of Chicago is pricing us out of here! I hate to rant on a Friday, but the most recently passed legislation infuriates me to no end.
In the last year, here are the major additional taxes that we have been hit with (on top of all sorts of other little increases in fines, fees and taxes that come out of the woodwork ever time I pay a bill):
1) Chicago Mass Transit Tax,part 1- This ridiculous circus act of legislation has been going on for months. Yesterday, they finally got resolution which involves the Real Estate Transfer Tax (which buyers pay) going from $7.50 per $1000 to $10.50 per $1000! This additional tax is being used to bail out the mass transit authority. The alternative was to increase fares from $2 to $3.25. My husband and I are currently shopping for homes in the $700K range. This means that when we go to buy, we will have to pay an additional $2100 (net of $7350) at closing. If the alternative was paying an additional $1.25 at the train station, this means that I will have to ride the CTA 1680 times to break even on this tax. Like houses were already flying off the market, I am sure this will help, thanks a lot. This hurts the affordability of buyers and can carry into the equity stake of sellers.
2) Chicago Mass Transit Tax, part 2- The second part of this textbook case for bad government, involves raising the sales tax from 9.0% to 9.25%in Chicago, and even higher tax increases in the collar counties. It sucks paying 9.0% in the first place on items that are typically already priced higher because we live in a big city, and it sucks even worse now. I love Chicago. I want to support it and especially support local merchants, but personally all this tax increase will do is make me buy more online. The shift in my spending habits became apparent this Christmas when I calculated that I saved about $150 in taxes by doing a bulk of shopping online for the first time. From now on this shift to online will only be more dramatic Instead of figuring out how to trim the fat out a budget, they are now going to get even less from me overall.
3) The Water Bottle Tax- On January 1 of this year the City of Chicago was the first in the nation to impose a 5 cent tax on bottled water sold in the city. They hope to decrease plastic waste and generate $10.5 million in revenue by doing this. I guess tap water was good enough for me growing up, and it is going to have to be good enough again as an adult.
4) Illinois State Toll Roads-It used to cost .40 or .80 to drive through a toll in Illinois. Last year those rates doubled to .80 and $1.60. The relief for this one is that if you have an EZ Pass, you pay the half this, taking the tolls back to their original rate. So this increase isn't nearly as painful as the first two.
I majorly simplified what happened with the first two increases in this post. If you want to find out more detail, I encourage you to click on the links provided. If you want to read the viewpoints of what other people are saying, check out this page of comments that CBS2 is compiling.
This whole situation is a big waste of taxpayer money and I fully intend to remember every name that was both involved in it and voted for it next time I am at the polls.
If you are wondering whether or not our Realtor lobbyist stepped in, yes, they were there. They are still there. They just weren't enough of a force against Chicago's corrupt government systems. Brian Bernardoni, director of government affairs for the Chicago Association of Realtors, made many appearances in Springfield. Earlier this week, the Realtors group pressured tax-weary aldermen to reject a transfer tax hike it called "anti-business, anti-affordable housing" and incredibly ill-timed in the midst of a housing slump.
"The mayor or whoever crafts the ordinance has a wide range of options, which changes our strategy. But, whoever the tax impacts, it's going to hurt. If they decide to impose the tax on the seller, it's stripping equity. If they apply it to the buyer, it'll be tougher to invest in Chicago," Bernardoni said.