Chicago City Wire

What are the odds homeowners will pay higher property taxes as local governments seek revenue in the wake of the COVID-19 pandemic?

High. Very high, says investor Jeffrey Carter. Try guaranteed.

The theory was floated in a June 26 Wirepoints article co-written by Ted Dabrowski and John Klingner that says local governments will seek to replace load tax revenue from commercial properties by hiking property taxes for homeowners.

“The lockdown has left many businesses and commercial properties with reduced or no income for months, bringing down the economic value of their properties,” the article states. “Many owners can be expected to appeal their property assessments to reflect that reality. Commercial and office space in downtown Chicago and other suburban areas will also see their assessments drop as businesses shrink their footprint going forward. Nationwide, over 74 percent of CFOs plan to permanently shift some employees to only work remotely post-coronavirus, according to a recent Gartner survey.”

Carter, a veteran investor, said there is no doubt property taxes will rise.

“Higher property taxes are 100 percent probable,” he told Chicago City Wire. “They have a balancing act because [Speaker Mike] Madigan needs the progressive tax to pass [in November].”

Carter said there are options to adding to the already burdensome load Illinois homeowners bear, but he doubts they will be considered by the state’s elected leaders.

“Pension reform and other policy decisions that are unpalatable to Democrats could stop a lot of tax increases,” he said. “The Democrats are looking to tax all pots of money. Retirement is next.”

The numbers bear out his statement.

“Between 2000 and 2017, Illinois median household incomes increased only 34 percent, far short of inflation,” Dabrowski and Klingner reported on Jan. 21, 2019. “In contrast household property tax bills are up 105 percent, according to Illinois Department of Revenue data.”

Carter, who served on the Chicago Mercantile Exchange board, co-founded the venture capital firm Hyde Park Angels and the financial technology startup company West Loop Ventures.

He’s also interested in politics, government and a variety of other issues that he explores on his blog Points and Figures. In addition he has advised the Group of Seven nations, Canada, France, Germany, Italy, Japan, the United Kingdom and the United States.