BIAGC Fights Chicago Tax Hike 

The Building Industry Association of Greater Chicago (BIAGC) today joined BOMA Chicago and a group of Chicago real estate associations in filing a lawsuit to knock the Chicago Transfer Tax Hike referendum off the March 19, 2024 primary ballot.  The lawsuit outlines how the proposed referendum question asking voters to increase the City of Chicago transfer tax violates both the Illinois Constitution and Illinois Municipal Law.  The lawsuit seeks an injunction preventing the Chicago Elections Board from certifying the referendum question because it is unconstitutional and unlawful, thus preventing it from being included on the March primary ballot.

The lawsuit challenges the referendum on three key points:

  1. Illinois Municipal Law limits referendum questions to only either imposing or increasing transfer taxes.  The proposed referendum includes both a reduction and an increase in the transfer tax, which violates that law.  This referendum is described as a textbook example of a prohibited legislative practice known as “log rolling.” This happens when a popular idea (lowering taxes) is combined with an unpopular idea (raising taxes) in order to carry the unpopular idea to passage. 
  2. Article III, Section 3 of the Illinois Constitution limits referendums to one issue. The proposed referendum combines three issues, thus violating the Constitution and violating voters’ rights to vote on each issue separately.  The three issues are:
    1. lower transfer tax from $3.75 to $3.00 for properties valued under $1 Million;
    2. increase tax to $10 for property valued $1M to $1.5M; and
    3. increase tax to $15 for property valued above $1.5M
  3. Proposed Referendum is “Vague, Ambiguous and Not Self-Executing” in violation of Illinois case law which clearly requires referendums to “stand on their own” and prohibits leaving “gaps to be filled by the legislature or municipal body.”  The referendum language is “vague and ambiguous” on the necessary detail on how the tax receipts will be used and is “not self-executing” because it defers decisions on how to use the money to City Council action at a later date.  The proponents of this referendum have made only vague promises with no details and no accountability on exactly how the money will be used.

Solving the issue of homelessness in Chicago will not be solved with this tax increase.  Increasing the transfer tax will instead just become another financial burden on developing, owning and selling real estate in Chicago, giving lenders and investors another reason to redline Chicago.   

If we can’t build affordably, how can we make it affordable!

Chicago needs more housing, not less, if it is going to solve this problem.  We need City leadership who understands that encouraging development is critical.  Stopping this tax hike referendum would be a major step in the right direction.

 

Questions? Email paul@biagc.org

Paul Colgan – Government Affairs

Building Industry Association of Greater Chicago

OFFICIAL DOCUMENTS:

Complaint Final Exhibit D Exhibit C Exhibit B Exhibit A