The Liberty Justice Center and Illinois Policy Issue Brief Against Chicago Ballot Referendum that Would Accelerate City’s Economic Decline

March 6, 2024

On March 4, the Liberty Justice Center filed a brief on behalf of Illinois Policy advising the Appellate Court of Illinois of the economic harm that would be caused by adopting a proposed Chicago ballot referendum.

A ballot referendum proposed by the City of Chicago would increase the City’s real estate transfer tax for both buyers and sellers on the portion of any real estate sale over one million dollars, while decreasing the tax on the portion of any real estate sale under one million dollars. The Cook County Circuit Court concluded that the ballot measure unlawfully combines a tax increase with a tax decrease, and ordered the Chicago Board of Elections not to count votes on it. The Board of Elections and City of Chicago appealed that Circuit Court’s decision to the Illinois Appellate Court.

On March 6, the Appellate Court overturned the lower court’s decision, stating that courts lack jurisdiction to hear challenges to ballot referenda that are part of the legislative process. The decision leaves the citizens of Chicago to vote on whether to adopt the referendum.

The Liberty Justice Center’s recent amicus brief on behalf of Illinois Policy challenges the referendum, noting that although it is touted as a “mansion tax,” it would primarily affect the purchase of commercial properties.

The brief argues that the tax would accelerate Chicago’s economic decline by effectively tripling the cost of many commercial properties—adding yet another barrier to entry for businesses trying to survive the city’s already cost-prohibitive tax environment and increasing the incentives to flee Chicago.

The brief also argues that the referendum is unlikely to raise the money expected—pointing to a similar tax recently implemented by the city of Los Angeles that brought in a mere 15% of its expected revenue—and points to the absence of a specific plan for the money that is raised.

“We regret that the courts won’t consider the legal challenge to this referendum. But the point we’ve made in our brief still stands: the State of Illinois and the City of Chicago are already driving residents and businesses away with taxes and financial mismanagement—and this referendum will make that problem worse,” said Jacob Huebert, President of the Liberty Justice Center.

“While the ballot initiative claims it would help the homeless, the fact is that the City of Chicago lays out no plan to do so—and already has tens of millions set aside for programs to address homelessness that it isn’t using,” said Mailee Smith, Senior Director of Labor Policy and Staff Attorney at Illinois Policy. “Ultimately, this ballot initiative represents bad policy and a danger to Chicago’s already fraught economy.”

The Liberty Justice Center’s amicus brief in Building Owners and Managers Association v. Board of Election Commissioners for the City of Chicago is available here.


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