Chicago Taxes Weigh Heavily on Office

CHICAGO—The city’s commercial property taxes are the second highest in the nation, second only to Detroit, but the persistent pension crisis could cause a further increase, according to the latest monthly report by MBRE. The $590 million pension problem, “in combination with a hot investment sales market in which the Cook County Assessor’s office will likely raise taxable property values across the board,” means “commercial landlords should be concerned at what new and increased taxes will do to the bottom line,” the firm notes.

In fact, to fully avoid the discretionary budget cuts necessary to solve the deficit, commercial property taxes would have to be increased by 71.6%. The largest recent tax hike by a major city was a 36% boost by Atlanta, but an equal hike in Chicago would still leave a $293 million funding gap. “Both figures reflect a harsh but true reality,” MBRE says. “There are no easy answers to Chicago’s debt.”