It's Back On: Votes On Transfer Tax Referendum Will Count After Court Ruling
Supporters of a real estate transfer tax referendum won the latest bout of legal warfare over the measure's validity, as a 1st District Illinois Appellate Court reversed an earlier ruling that would've struck the referendum from the March ballot.
In a blow to real estate interests, Judge Raymond Mitchell ruled Wednesday afternoon in favor of the city that votes cast on March 19 will count after all. The measure would raise taxes on property sales over $1M.
In late February, Cook County Judge Kathleen Burke sided with CRE industry groups that brought a lawsuit to knock the tax question off the ballot. That decision invalidated the referendum, preventing election officials from counting any votes.
In Mitchell's ruling, he wrote that the decision doesn't suggest the court has an opinion on the issue. But, he said, the referendum question should be put to the city's voters instead of the court, Crain's Chicago Business reported. The circuit court made a mistake when it exercised jurisdiction over the CRE industry groups' complaint, he said.
"Fealty to our constitutional system of government and to well-settled concepts of justiciability requires us to decline to interfere with the legislative process," Mitchell wrote.
Mayor Brandon Johnson's proposal, dubbed Bring Chicago Home by supporters, would put additional tax revenue toward addressing homelessness. CRE critics say it would slow a market already hammered by plummeting property values and a tight financing environment.
The measure would create a tiered system to lessen the burden on property sales smaller than $1M to 0.6% and up the rate on larger sales. The transfer tax on sales between $1M and $1.5M would be 2%, while the transfer tax on property sales over $1.5M would go up to 3%, quadrupling the current rate.
"I’ve said all along the people of Chicago should determine how we address the unhoused crisis in Chicago," Johnson said after the decision, Block Club Chicago reported. "And I made a commitment as not just a candidate but as mayor of the city of Chicago that I will do everything in my power to move us closer towards housing for all."
BOMA Chicago Executive Director Farzin Parang, whose organization led the industry group that filed the lawsuit to pull the tax off the ballot, told CoStar that if voters approved the referendum, they would be giving a blank check to the city without a plan for how it will spend the money.
He said BOMA has increased its efforts to educate the public on the negative impacts of the tax.
Proponents and opponents of the bitterly contested tax proposal have pumped hundreds of thousands of dollars into flyers and door-knocking to convince voters to take their side.
"We are disappointed in the outcome of this case, but felt it was important to challenge this misleading and manipulative referendum question," Parang said in a statement. "This massive tax increase would hurt homeowners, renters, union workers and businesses throughout the neighborhoods."
