Chicago Judge Blocks Transfer Tax Referendum From March Ballots
A Cook County Circuit Court judge has knocked a measure to raise taxes on property sales larger than $1M off next month's ballot.
Judge Kathleen M. Burke's ruling Friday on a lawsuit brought by BOMA Chicago and others will invalidate the referendum set for March 19, meaning no votes can be counted. The judge separately denied a motion from the Chicago Board of Elections to dismiss the suit. Proponents of the tax plan to appeal and are urging voters to turn up to the polls anyway.
The ruling represents a blow to Mayor Brandon Johnson, who championed the Bring Chicago Home bill aimed at raising additional revenue to address homelessness. Meanwhile, nervous opponents in the CRE industry are breathing a sigh of relief.
BOMA Chicago Executive Director Farzin Parang, an outspoken opponent of the tax, in a statement called the judge's ruling gratifying and highlighted the importance of “presenting policy questions to the public with fairness, detail, and transparency.”
“This referendum would be a backdoor property tax on all Chicagoans, and it is important that our elected officials not mislead voters otherwise,” Parang said.
BOMA led a coalition of contractors, developers, investors and CRE interests when it filed a lawsuit in early January seeking an injunction to prohibit the Election Board from putting the tax proposal before voters next month.
BOMA and the coalition objected to the referendum on several grounds, including that the ballot language asks a three-part question that requires voters to weigh in with a single yea or nay on separate policies, in violation of municipal code and the Illinois Constitution. The coalition also argued the portion of the proposal that would lower taxes on sales of less than $1M doesn't belong on a ballot at all, citing a state statute that only allows the city council to hold referendums on increases.
Some onlookers told The Real Deal they were unhappy with the decision.
“It’s supposed to be my city, my vote. She just got through telling me that my vote doesn’t matter,” referendum supporter Shantonia Jackson told TRD, referring to the judge's ruling.
The proposal was for a tiered system to reduce the burden on property sales of less than $1M to 0.6% and increase the rate on larger sales. The transfer tax on sales between $1M and $1.5M would have been 2%, while the transfer tax on property sales over $1.5M would have increased to 3%, quadrupling the current rate.
