CHICAGO (CN) — With the state's March 19 elections quickly approaching, the Illinois Supreme Court on Wednesday declined to review a proposed referendum asking voters if the city should restructure how it taxes real estate sales.
Mayor Brandon Johnson's proposed referendum, which he and other progressives have dubbed "Bring Chicago Home," would introduce tiers into the current real estate tax system, lowering the percentage on most sales but raising the rate on high-end properties.
Currently, Chicago's real estate transfer tax sits at a flat rate of 0.75%, or $3.75 per $500, for the entire value of the property. Mirroring a failed 2020 Illinois tax reform referendum, Johnson's proposal seeks to introduce three tax rates that would vary based on the cost of the property.
The transfer tax for properties worth less than $1 million would decrease to 0.6%, while it would increase to 2% for properties sold for between $1 million and $1.5 million. Properties sold for more than that would be subject to a 3% transfer tax, or $15 per every $500 of the transfer price — almost quadruple the current rate.
Johnson and other proponents of the changes have called it Chicago's mansion tax and say the adjustment could generate up to $100 million per year in additional funding to fight homelessness.
Since the referendum passed the City Council, it has been mired in legal challenges. A coalition of landlords, real estate agencies and property investment firms took to the courts to challenge the referendum in January.
The plaintiffs claim the referendum violates Article III of the state's constitution because of how the question is posed.
They say the referendum "violates voters’ rights to vote on each of the three questions separately. For example, and most obviously, many voters likely support the first question (lowering taxes), but oppose the second and third questions (raising taxes). However, they cannot express their support for the first proposition without also expressing support for the second and third propositions that they oppose."
Cook County Judge Kathleen Burke sided with the coalition of landlords, though the city quickly filed a motion to stay the enforcement of Burke's ruling. An Illinois appellate court then overturned Burke's decision, which means the referendum will appear on the ballot unless the high court intervenes. The state Supreme Court on Wednesday denied the real estate lobby's petition to appeal the referendum.
Scot Schraufnagel, a political science professor at Northern Illinois University, said if it remains on the ballot, the referendum will likely be determined by who wins the "framing game."
"Who can frame the issue in a way that is most palatable, but also ... that gets people excited, it gets people motivated," Schraufnagel said. "Johnson's use of 'mansion tax' is effective, I think."
Nick Kachiroubas, a professor in the school of public service at DePaul University, agreed that the referendum would be tough to pass: "I think it will probably fail, in my opinion. But if it gets sort of a high degree of votes ... where it's close, that will put political pressure on the Chicago City Council, which can basically bring this back up or go through a process to create a revenue stream that would provide for the resources for this particular tax."
Aside from the tax referendum and the myriad of state Legislature and judicial seats up for reelection, there are also two Democratic primaries in the 4th and 7th Congressional districts.
The Democratic primary for the largely Latino 4th Congressional District is somewhat emblematic of the current schism in the party.
U.S. Representative Jesus "Chuy" Garcia, the incumbent, represents the party's more progressive wing. A former state senator who was elected in 2019, Garcia has been a champion of labor unions and has made ending family separation at the border one of his central issues.
Conversely, 15th Ward Alderperson Raymond Lopez represents the Democrats' more moderate wing. He's been vocally opposed to Johnson's handling of the influx of migrants and led a failed effort last year for a ballot referendum on Chicago's status as a sanctuary city.
“I think the Democratic Party, particularly in Illinois, but also nationally, is searching for its soul," Kachiroubas said. "Raymond Lopez is more conservative. And I think the constituency of that district is split, where I think you have a lot of conservative Latino voters who are not happy with all the migration and immigration issues.”
Garcia has attracted more donations, which Lopez has attributed to his entering the race later than his opponent. According to The Chicago Sun-Times, as of Feb. 4, Garcia had $336,000 in campaign contributions, whereas Lopez had $46,000.
“Chuy Garcia has out-fundraised Raymond Lopez, but what Raymond Lopez is doing is running a grassroots effort, going door to door knocking on people's doors," Kachiroubas said. "And that is a powerful thing."
Schraufnagel echoed Kachiroubas' sentiment about the effectiveness of door-to-door campaigning, but he said Garcia has a rich network to count on for support.
"Because [Garcia] is an incumbent, he's done favors for people, he's produced legislation," Schraufnagel said. "He's helped people find their way through the federal bureaucracy, and helped people with their immigration matters."
The incumbent advantage also plays a big factor in the Democratic primary in the 7th District, as longtime U.S. Representative Danny Davis faces four challengers — Melissa Conyears-Ervin, Kina Collins, Kouri Marshall and Nikhil Bhatia — in the March primary.
Elected to the House in 1997 and now 82 years old, Davis has served on the House Ways and Means Committee. In this election in particular, however, challengers are running on bringing a fresh voice to the mix.
"Certainly, the issue of age has come up, notably because of the age of the two presidential candidates," Kachiroubas said. "But I don't think Danny Davis has ever had any sort of issues with sort of being able to do his job or speak effectively."
Davis' biggest challenger is City Treasurer Conyears-Ervin, who has bested Davis in campaign contributions. Despite this, Davis' name recognition sets him up more favorably in the upcoming election.
"I think if you asked 10 people in Chicago who the city treasurer was, they probably wouldn't be able to tell you," Kachiroubas said. "So I think because of Danny Davis, his name recognition, his record in Congress, and his funding and his backing, that he should he should win."
Whether the candidate is an incumbent or has raised more money may not even matter on March 19. It will likely come down to voter turnout.
"There could very well be as low as 25% voter turnout and so everything's going to come down to mobilization," Schraufnagel said. "And which candidate is able to mobilize individuals? That's going to determine the winner."
Follow @RosenCaitlyn
Subscribe to Closing Arguments
Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.
Additional Reads
-
-
Newsom’s ‘May revise’ trims budget to $288 billion May 10, 2024
