Appeals Court Reinstates Chicago Real Estate Tax Ballot Question

The Appellate Court of Illinois has overturned a ruling last month by a Cook County judge who invalidated a March 19 city referendum on Chicago Mayor Brandon Johnson’s proposal to adjust Chicago’s property transfer tax.

The ballot question will let voters decide whether to approve Johnson’s plan, which proposes to raise one-time real estate transfer taxes on transactions above $1M while decreasing the transfer tax on property trades below $1M.

Under Johnson’s plan, the tax for transactions of more than $1M will be graduated, with properties between $1M and $1.5M incurring a tax increase of $10 per every $500, and properties valued at more than $1.5M facing charges of $15 for every $500.

Additional revenue generated by the tax on $1M and over transactions would go towards services for the city’s homeless population.

A local chapter of the Building Owners and Managers Association (BOMA) filed a lawsuit against the Chicago Board of Elections in county court challenging the ballot question, arguing that it would mislead voters by raising and lowering the transfer tax at the same time.

BOMA’s lawsuit said the ballot question violates the Illinois Constitution and the Illinois Municipal Code. Cook County Circuit Court Judge Kathleen Burke ruled in February that the referendum would not be valid and denied a motion by the city to join the case and defend the ballot question.

City Hall and the Chicago Board of Elections filed an appeal of Burke’s ruling. Last week, the appellate court reinstated the ballot question, ruling that BOMA’s lawsuit was “premature.”

The three-member Appellate Court panel said Illinois courts haven’t interfered in challenges to referendums that are part of the legislative process, according to a report in Bloomberg. The court ordered the lower court to dismiss the lawsuit on the grounds that the court does not have jurisdiction to invalidate the referendum before city voters decide the question.

“I’ve said all along that the people of Chicago should determine how we address the unhoused crisis in Chicago,” Johnson said, in a statement after the appeals court ruling.

“We are disappointed in the outcome of this case, but felt it was important to challenge this misleading and manipulative referendum question,” Farzin Parang, executive director of BOMA’s Chicago chapter, said in a statement.

“This massive tax increase would hurt homeowners, renters, union workers, and businesses throughout the neighborhoods,” Parang said. “Even worse, a yes vote on this referendum is a vote to deliver huge blank checks to the city with no plan for how millions will be accountably spent.”