Accounting
Chicago passes 2025 budget without property tax hike
The Chicago City Council approved an approximately $17 billion budget for 2025 that raises levies and fees by more than $180 million after Mayor Brandon Johnson removed his proposed property tax hike.
The spending plan comes after weeks of contentious talks between the Johnson administration and aldermen over how to close a nearly $1 billion deficit with higher taxes or cuts. The depth of disagreements had raised concerns about whether a budget would pass by the Dec. 31 statutory deadline. The budget passed 27 to 23 on Monday.
“I know this was a long and arduous process,” Johnson said in remarks in the council chamber after the votes. “The budget we passed today is yet another down payment on securing a better, stronger and a much safer future for the people of this fine city.”
To win approval, the first-term progressive mayor had to revise his plan amid vigorous pushback from council members. His original proposal in October included a
The spending plan won approval after Johnson and his team used a series of piecemeal items, including other taxes and fees to fill the nearly $1 billion deficit in the city’s more than $5 billion operating fund, known as the corporate fund. That fund pays for public safety, streets and sanitation among other services. The revenue measure also includes $128 million from higher
Before the vote, Alderman Carlos Ramirez-Rosa, an ally of Johnson, said he supported the budget. He highlighted the critical investments in youth employment and mental health services as well as the supplemental pension payment.
Johnson’s budget uses about $54 million in savings from a municipal-bond refinancing earlier this month to help plug the deficit. While officials had considered using those funds to repay debt related to a loan for the 2009 purchase of the former Michael Reese Hospital, the city is now deferring that repayment.
The revised budget also cut vacant positions including positions in the mayor’s office. The budget passed even though some city council members complained about the lack of cuts and transparency. Chicago’s business community has voiced opposition to tax levies as they fear any hikes will curb economic growth and further raise the cost of living in the third-largest U.S. city.
“We cannot continue to spend beyond our means, but we do,” Alderman Marty Quinn said before the vote. “While there’s no longer a property tax increase on the table, there are a number of nickel and dime revenue generators.”
Easing restrictions, sharpening personal attention and clarifying denials are among the aims of
The programs focus on “fast track settlement,” which allows IRS Appeals to mediate disputes between a taxpayer and the IRS while the case is still within the jurisdiction of the examination function, and post-appeals mediation, in which a mediator is introduced to help foster a settlement between Appeals and the taxpayer.
The IRS has been revitalizing existing ADR programs as part of transformation efforts of the agency’s new strategic plan, said Elizabeth Askey, chief of the IRS Independent Office of Appeals.
“By increasing awareness, changing and revitalizing existing programs and piloting new approaches, we hope to make our ADR programs, such as fast-track settlement and post-appeals mediation, more attractive and accessible for all eligible parties,” said Michael Baillif, director of Appeals’ ADR Program Management Office.
Among other improvements, the pilots:
- Align the Large Business and International, Small Business and Self-Employed and Tax Exempt and Government Entities divisions in offering FTS issue by issue. Previously, if a taxpayer had one issue ineligible for FTS, the entire case was ineligible.
- Provide that requests to participate in FTS and PAM will not be denied without the approval of a first-line executive.
- Clarify that taxpayers receive an explanation when requests for FTS or PAM are denied.
Another pilot, Last Chance FTS, is a limited scope SB/SE pilot in which Appeals will call taxpayers or their representatives after a protest is filed in response to a 30-day or equivalent letter to inform taxpayers about the potential application of FTS. This pilot will not impact eligibility for FTS but will simply test the awareness of taxpayers regarding the availability of FTS.
A final pilot removes the limitation that participation in FTS would preclude eligibility for PAM.
The traditional appeals process remains available for all taxpayers.
Inquiries can be addressed to the ADR Program Management Office at
The Internal Revenue Service has updated and added new guidance for taxpayers claiming the Energy Efficient Home Improvement Credit and the Residential Clean Energy Property Credit.
The updated
New sections have been added on how long a taxpayer has to claim the tax credits, guidance for condominium and co-op owners, whether taxpayers who did not previously claim the credit can file an amended return to claim it, and a series of questions on qualified manufacturers and product identification numbers. Other material has been added on how to claim the credits, what kind of records a taxpayer has to keep for claiming the credit, and for how long, and whether taxpayers can include financing costs such as interest payments in determining the amount of the credit.
The IRS states that “financing costs such as interest, as well as other miscellaneous costs such as origination fees and the cost of an extended warranty, are not eligible expenditures for purposes of the credit.”
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